Discussion Paper No. 906

INHERITED SOCIAL CAPITALAND RESIDENTIAL MOBILITY:
A STUDY USING JAPAN PANEL DATA
Eiji Yamamura
Yoshiro Tsutsui
Chisako Yamane
Shoko Yamane

July 2014

The Institute of Social and Economic Research
Osaka University
6-1 Mihogaoka, Ibaraki, Osaka 567-0047, Japan

Inherited social capital and residential mobility:
A study using Japan panel data
Eiji Yamamuraa, Yoshiro Tsusuib, Chisako Yamanec, Shoko YamanedaDepartmentof Economics, Seinan Gakuin University, 6-2-92 Sawaraku Nishijin,Fukuoka 814-8511, Japan.
bDepartmentof Economics, Konan University. 8-9-1 Okamoto Higashinada-ku, Kobe

658-8501, Japan.
cDepartmentof Economics, Okayama Shoka University. 2-10-1 Tsushima Kyomachi

Kitaku, Okayama 700-8601, Japan.
dDepartmentof Economics, Kindai University. 3-4-1 Kowakae Higashi-osaka, Osaka

577-8502, Japan.

Abstract
Empirical results based on individual-level data from Japan were studied todetermine the effect of social capital on the willingness to leave one’s residential area.
It was found that social capital accumulated through one’s own experience in a
residential area is not the only factor that reduces willingness to leave. Social capitalinherited from one’s parents also negatively influences the desire to move.

Keywords: social capital, residential mobility.

JEL classification: Z13, J61.

This research uses micro data from the Preference Parameters Study of Osaka
University’s 21st Century COE (Center Of Excellence) Program ‘Behavioral
Macrodynamics Based on Surveys and Experiments’ and its Global COE project ‘Human
Behavior and Socioeconomic Dynamics.’ We acknowledge the program/project’s
contributors: Yoshiro Tsutsui, Fumio Ohtake, and Shinsuke Ikeda.

1. Introduction
Decision-making regarding the geographical relocation of one’s residential region
can be explored from an economic perspective (Deding and Filges, 2010; Been et al.,2011). Stemming from the development of the psychological aspects of economic
behavior, recent studies have analyzed individuals’ location choices and their outcomesby considering relevant psychological factors (Barret and Mosca, 2013). People who are
not only physically but also mentally supported by local interpersonal networks bear a
psychological cost if they lose such connections. In these cases, people are unlikely tomove geographically. This paper focuses on this issue.
Social capital can be defined in various ways: community participation, social
network, and trust (Putnam, 1993). Existing empirical studies have shown that social
capital is negatively associated with individuals’ intentions to leave their residential
areas (Kan, 2007; Belot and Ermisch, 2009; David et al., 2010). Social capital isthought to be inherited from generation to generation, and then influence economic
outcomes.1 However, little is known about the effect of inherited social capital on thegeographical mobility of individuals. Based on novel individual-level data providing
information on parents’ birth prefectures, this paper attempts to explore the influenceof inherited social capital on the willingness of individuals to leave their residentialprefectures. The main findings of our estimation indicate that not only social capital
but also inherited social capital reduce individuals’ willingness to leave theirresidential areas.

1 Algan and Cahuc (2010) examined how social capital inherited from respondents’ homecountries affects the economic growth rate.

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2.

Data and Model
The individual-level data used in this paper were sourced from the “Survey of Life

Satisfaction and Preferences”, conducted as part of the Global Center of Excellence
Program at Osaka University. The data were gathered using random sampling, withmale and female respondents aged 20–69. The data collected include basic informationsuch as age, sex, household income, family members, willingness to migrate, andprefecture of current residence. A novel aspect of this paper is that the data show not
only the prefecture where respondents lived at 15 years of age but also the prefecture
where their parents were born.
The question concerning the key variable in the present study, willingness tomigrate, was only included in surveys conducted in 2009, 2010, and 2012. The sample
size of the data used in this paper exceeds 11,000 observations. Table 1 presents thedefinitions and mean values of variables.
The estimated function takes the following form:

Move itp = α0 + α1 Social capital itp + α2 Inherited social capital itp + α3 Parents resided
itp + Y’ itp B + K’p C + L’i D + u itp,

where Move it represents the dependent variables individual i, year t, andprefecture p. Furthermore, Move is a dummy with a value of 1 if the respondent iswilling to leave the prefecture where he/she currently lives, otherwise 0. Accordingly, aprobit estimation model is used. The vector of the dummies for residential prefectures
captures time invariant residential place fixed effects and is denoted by Kp. 2 Inaddition, Li is the vector of the dummies for residential prefectures at 15 years of age.
The vector of individual-level control variables is Y, which captures the influence of theJapan consists of 47 prefectures, which represent the main teritorial divisions. In
addition to current residential prefectures, dummies for prefecture where respondents
lived at 15 years of age are included.

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various respondents’ individual characteristics. 3 The vectors of the regression
parameters are denoted as B, C, and D. The error term is denoted by u.
The regression parameters of key independent variables are denoted by α. Social

capital is 1 when current residential prefecture is the same prefecture whererespondents lived at 15 years of age, otherwise 0. Assuming that the longer people livein an area, the greater their attachment to that area, Social capital captures the levelof attachment to a residential area.
In the questionnaire, respondents were asked, “In which prefecture were yourparents and your spouse’s parents born?” Based on the answers, the following variable
is made. Inherited social capital has a value of 1 when respondents’ current residential
prefecture is the same as their parents’ birth prefecture, otherwise 0.4 Furthermore,

Social capital and Inherited social capital are mutually exclusive. To capture theinfluence of respondents’ parents’ homes, but not respondents’ own experiences,Inherited social capital has a value of 0 if Social capital is 1. Here, we assume that thenetwork inherited from parents (e.g., via relatives or strong community ties) exists
when respondents live in their parents’ home area even though respondents have notgrown up there.

Parents resided has a value of 1 if respondents and their parents live in the same
prefecture at the time the survey was conducted, otherwise 0. Family ties play a
critical role by providing support and can substitute for market services. For instance,support for parents when raising their children is very important and therefore family

3 Basic social and economic variables are included: income level, dummies for educational
background, dummies for occupation, age, dummies for marital status, family structure,gender dummy, and dummies for type of residence.
4 Here, Inherited social capital is 0; current residential prefecture is the same as theprefecture if only the respondent’s mother or father come from that prefecture.

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proximity should be taken into account (Compton and Pollak, 2014). Social capital,

Inherited social capital, and Parents resided are predicted to reduce the willingness toleave one’s residential area. Accordingly, it is predicted that these three variables will
be negative.

3. Results
Table 2 shows the marginal effects and z-values obtained by conducting a
probit estimation model. Column (1) indicates the results when all control variables
are included. For a robustness check, columns (2) and (3) present the results whensome control variables are excluded. We focus on the results of the key variables toexamine the effects of the three types of social capital studied in this study, Socialcapital, Inherited social capital, and Parents resided. In columns (1)–(3), thecoefficients of these variables are negative and statistically significant. This suggeststhat social capital reduces the incentive to leave one’s residential prefecture, which isconsistent with previous research (Kan, 2007; Belot and Ermisch, 2009; David et al.,2010). Furthermore, the absolute value of the marginal effect of Social capital is 0.11,
while that of Inherited social capital is 0.07. This implies that people are less likely toleave their residential prefecture by 11% if it is the prefecture they lived in when they
were 15 years old. People are less likely to leave by 7% if the current residential
prefecture is the same region their parents came from, even though they did not grown
up there themselves. The effect of Inherited social capital is sizable even after
controlling for other types of social capital.

44. Conclusions
The novel dataset used in this study provided information not only on
respondents’ home prefectures but also those of their parents. This enabled us todistinguish between respondents’ attachment to their home prefecture and thatassociated with the prefectures of their parents. The empirical results of this study
show that (1) respondents who live in the prefecture where their parents also live are
more likely to be unwilling to leave, (2) respondents who live in the area where they
grew up are more likely to be unwilling to leave, and (3) respondents who live in thesame area where their parents were born are also unwilling to leave, even though they
themselves did not grow up there. These findings imply that the social capitalinherited from parents provides people with significant benefits to live in certainareas.

5References
Algan Y. and Cahuc, P. (2010). Inherited trust and growth. American Economic Review,100(5), 2060–92.
Barret, A. and Mosca, I. (2013). The psychic costs of migration: evidence from Irish
return migrants. Journal of Population Economics, 26(2), 483–506.
Been, V, Ellen, I.G., Schwartz, A.E., Stiefel, L. and Weinstein, M. (2011). Does losing
your home mean losing your school? Effects of foreclosures on the school mobilityof children. Regional Science and Urban Economics, 41(4), 407–414.
Belot, M. and Ermisch, J. (2009). Friendship ties and geographical mobility: Evidence
from Great Britain. Journal of the Royal Statistical Society: Series A, 172(2),427–442.
Compton, J. and Pollak, R.A. (2014). Family proximity, childcare, and women’s laborforce attachment. Journal of Urban Economics, 79, 72–90.
David, Q., Janiak, A. and Wasmer, E. (2010). Local social capital and geographicalmobility. Journal of Urban Economics, 68(2), 191–204.
Deding, M. and Filges, T. (2010). Geographical mobility of Danish dual-earner couples:
The relationship between change of job and change of residence. Journal ofRegional Science, 50(2), 615–634.
Kan, K. (2007). Residential mobility and social capital. Journal of Urban Economics, 61,436–457.
Putnam, R. (1993). “Making Democracy Work: Civic Traditions in Modern Italy”.
Princeton: Princeton University Press.

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Table 1. Variable definitions and mean values
Variable

Willingness
to move
Social capital
Inheritedsocial capital
Parents
residedAge
IncomeUnmarried
Divorced
WidowedFamily size
Presence ofchildHigh school
Junior college
University

Definition
Value of 1 if respondent is willing to move to otherprefectures, otherwise 0
Value of 1 if respondent’s current residential prefecture is
the same as when aged 15, otherwise 0
Value of 1 if respondent’s current residential prefecture is
the same prefecture where their father and mother wereborn, otherwise 0 (value is 0 if Home is 1)
Value of 1 if respondents live in the prefecture where
their parents reside, otherwise 0
Respondent’s age
Household income (millions of yen)
Value of 1 if respondent is unmarried, otherwise 0 (%)
Value of 1 if respondent is divorced, otherwise 0 (%)
Value of 1 if respondent is widowed, otherwise 0 (%)
Number of people living in the household
Value of 1 if respondent has a child under 12 years old,
otherwise 0
Value of 1 if respondent’s highest educational
qualification is high school, otherwise 0.
Value of 1 if respondent’s highest educational
qualification is junior university, otherwise 0
Value of 1 if respondent’s highest educational
qualification is university or graduate school, otherwise
07

Mean
0.12
0.76
0.01
0.75
50.8
6.55
0.14
0.05
0.03
3.74
0.25
0.50
0.15
0.26

Table 2. Determinants of willingness to move (probit model)
Variable

(1)

(2)

(3)

Social capital−0.10***(−6.43)−0.07**(−2.56)−0.03**(−2.34)−0.003***(−8.73)0.06*103(0.08)
0.01(0.46)
0.02(1.41)
0.02(1.15)
0.001(0.72)−0.02***(−3.35)0.05***(3.81)
0.07***(4.14)
0.08***(4.78)
Included−0.11***(−6.82)− 0.07**(−2.59)−0.03**(−2.24)−0.003***(−10.4)0.18*103(0.08)
0.003(0.36)
0.02*(1.87)
0.01(0.90)
0.001(0.33)−0.02***(−3.53)0.05***(3.99)
0.07***(4.39)
0.08***(5.08)
Not included−0.11***(−6.81)− 0.07***(−2.61)− 0.03**(−2.24)−0.003***(−10.4)0.19*103(0.26)
0.003(0.37)
0.02*(1.87)
0.01(0.90)
0.001(0.38)−0.02***(−3.56)0.05***(3.98)
0.07***(4.39)
0.08***(5.05)
Not included

Included

Not included

Not included

Included

Included

Not included

637
11,090667
11,652657
11,652Inherited social
capitalParents resided
Age
IncomeUnmarried
Divorced
WidowedFamily size
Child(ren)High school
Junior college
UniversityDummies for typeof residence aDummies foroccupationb
Dummies for size ofresidential cityc
Wald Chi-squares
Observations

Note. In all results, the model includes constants, gender dummy, year dummies,
dummies for current residential prefecture, and dummies for prefecture whererespondents resided at 15 years of age. These are not reported in Table 2. Values
without parentheses are marginal effects. Values in parentheses are z-statistics
calculated using robust standard errors. ***, ** and * denote significance at the 1%, 5%
and 10% levels, respectively.
a.

There are eight residence categories.

b.

There are 13 occupation categories.

c.

There are four categories of size of residential city.

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