# **1.  Introduction**

A growing part of development economics literature supports the idea that differences in health outcomes, cannot be explained entirely by differences in human and physical capital (Macinko and Starfield, 2001; Almedom 2005) and argues that the absence of social capital is one of the major impediments to economic development (Subramanian et al., 2002; Putnam et al., 1993; Woolcock, 1998; Dasgupta and Serageldin, 2000; Grootaert and van Bastelear, 2002). This paper contributes to this literature, by studying the association between mothers’ access to social capital via participation in community activities and their children nutritional status at 1 and 5 years.

In previous studies, social capital has been hypothesized as a substitute for other forms of capital, such as physical and human capital (Kunitz, 2004). The hypothesis is that maternal social participation exacerbates a lack of human and physical resources. I suggest that social participation is particularly effective in improving child nutritional status when the mother’s human capital (measured by her education) and physical capital (measured by family economic resources and assets) are limited. In developing countries or within poor communities social capital might act as a protective factor. In the absence or shortage of public good provision, community organizations may mobilize members to provide missing public goods and facilitate the access to services and information (Durlauf and Fafchamps, 2004; Campbell et al., 1999).

For the empirical analysis, I use the Peruvian sample of the _Young Lives project_ (YL), which is a longitudinal dataset following children at two points in time, at age 1 and 5, and gathering information on child nutritional status and maternal social capital. Notably, Peru is an interesting context to study the association between social capital and child health, given the high rate of both child malnutrition and social participation.

In order to test if social capital is substitutable or complementary to human and physical capital, I allow for heterogeneous effects of maternal social capital on child nutritional status for different levels of maternal education and household wealth status. I find evidence of the substitutability between social and human capital. Maternal social capital is positively associated with 1 year old children’s height-for-age for those children whose mothers have no education.

Consistent with Cunha and Heckman’s (2007) criticism of the assumption of perfect substitutability between investments made at different ages, I find that early investments are more effective during the first year of life than in later childhood. Indeed, I do not find evidence for an association between maternal social participation and nutritional status at 5 years of age.

This paper contributes to the debate from an empirical perspective, addressing three gaps in the literature on social capital and health. First, most of the literature focuses on adult health and uses mainly data from developed countries (for reviews, see Macinko and Starfield, 2001; Almedom, 2005).

Second, several empirical analyses ignore the potential reverse causality issue arising when looking at maternal social capital and child health. Plausibly, poor child health might prevent mothers from participating actively in community life or conversely, might encourage mothers to participate in order to have access to health services and advices. On the other hand, maternal 2