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Social capital is often place-specific while schooling is portable, so the prospect of migration may reduce the returns to social capital and increase the returns to schooling. If social capital matters for urban success, it is possible that an area can get caught in a bad equilibrium where the prospect of out-migration reduces social capital investment and a lack of social capital investment makes out-migration more appealing. The authors present a simple model of that process and then test its implications. They find little evidence to suggest that social capital is correlated with either area growth or rates of out-migration.
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