Income, Wealth, and Socialization in Argentina: Provocative Responses from Individuals
Lederman focuses on two objectives in his study: (1) to establish a baseline measurement of the level and geographic distribution of social capital in Argentina, and (2) to identify its empirical determinants. The study's survey questionnaire provides individual-level data on the population's participation in social organizations and willingness to trust members of its community. Probit models are estimated to explain the individual's decision to participate and to trust strangers, and individual-household and community characteristics are used as explanatory variables. Potential simultaneity and endogeneity problems afflicting the empirical models are examined. The main determinants of the probability of participation in Argentina are age, age squared, household income (and perhaps income squared), rural communities (perhaps due to lower probabilities of migration among rural residents since most migrants live in urban centers), community or provincial unemployment rates, and individual trust. In contrast, the main determinants of trust are age and age squared (but with opposite signs to those exhibited by probability of participation), household wealth (but not its squared term nor household income), participation (as shown by the Seemingly Unrelated Regressions Probit results on the cross-correlation between the two social capital models), and community or provincial unemployment rates and income inequality. It is noteworthy that the common question on trust used in the U.S. General Social Survey and in the World Values Survey yields results whereby communities with higher "trust" rates actually have lower social participation rates. Finally, participation in organizations with participatory leadership selection mechanisms are more likely to produce interpersonal trust than other forms of participation.