Should I stay or should I go?: regional mobility and social capital

This paper explores the relationship between social capital and regional labour mobility. It analyses both the effect of social capital on mobility, and the role of mobility concerning the decision to invest in social capital. Individuals live for two periods. In the first period they work and invest in regionally immobile social capital. At the end of the period there may be an income shock. In the case of a shock, individuals have to decide whether to move into another region where they can maintain their income but lose social capital, or to stay in the region, accepting the income loss but maintaining their social capital. Social capital depends on the individual's own investment as well as that of other individuals. This gives rise to multiple equilibriums.

Published abstract.

This paper explores the relationship between social capital and regional labour mobility. It analyses both the effect of social capital on mobility, and the role of mobility concerning the decision to invest in social capital. Individuals live for two periods. In the first period they work and invest in regionally immobile social capital. At the end of the period there may be an income shock. In the case of a shock, individuals have to decide whether to move into another region where they can maintain their income but lose social capital, or to stay in the region, accepting the income ...  [+] Show more