53rd Congress of the European Regional Science Association: "Regional Integration: Europe, the Mediterranean and the World Economy", 27-31 August 2013, Palermo, Italy
Putnam (1995)'s seminal work was one of the first to describe the decline of social capital in the US after the 1960s, a period that saw a large increase in the flow of immigrants into the US. Using the Volunteer Supplement of the September Sample of the Current Population Survey (CPS) between 2005 and 2011, we examine the relationship between immigration and social capital in the US, measured by membership of organizations, volunteering and hours volunteered. To the best of our knowledge, this is the first paper to address this question. Once we correct for immigrants' self-selection to different destinations using a supply-push instrumental variable, we find that a one standard deviation increase in the number of immigrants decreases volunteering by 0.08 to 0.12 standard deviations, or that the 8.7 million legal immigrants who entered the US between 2005 and 2011 reduced the probability Americans volunteered between 27.8% and 35.7%. From our robustness checks we argue that the reduction in volunteering by natives is driven by the the fact that new immigrants have a lower social capital, reducing the benefits of volunteering. Our results have important implications for public policy. We show that migrants' social capital has an impact on receiving communities. Therefore immigrants' social capital (such as having relatives living at the receiving community) should be taken into consideration. Future research should focus on what is the optimal weight to give to the presence of family members versus, for instance, educational level of the immigrants.