Does social capital play a role in intergenerational poverty reduction? Evidence from Indonesia

Abstract

Abstract This study investigates the relationship between social capital and intergenerational poverty in Indonesia. Using data from the Indonesian Family Life Survey, we construct an index of social capital that measures community participation of the first generation (household heads). Then, we generate individual and village/community characteristics and set a dummy variable for intergenerational poverty. To examine the relationship between social capital and intergenerational poverty, we employ the ordinary least squares method with district fixed effects to account for unobservable district level factors. We find a negative and statistically significant correlation between social capital and intergenerational poverty. The findings suggest that individuals in the second generation who grew up in families with a higher social capital in the first generation are less likely to be poor.