Determinants of Social Capital in Korea

This study investigates the determinants of social capital in Korea using the law compliance indicator as a measure of generalized trust. Unlike other measures for social capital, the compliance indicator has been compiled for each province in Korea. This novel feature allows for better identification strategies than the countrylevel data. With the panel data of 16 regions in Korea, we find that in the demographic factors, such as gender and age structure, the compliance indicator is low for males and the elderly. Among variables for economic activity, unemployment rate and per capita GRDP show statistically significant effects. Moreover, the causality tests between the compliance indicator and economic activity show bilateral directions as expected.