The impacts of social capital on rural household’s income: empirical evidence from rural Vietnam

Abstract

This study empirically examines how social capital affects household income in rural Vietnam using the VARHS 2012-2014 surveys. We operationalized four forms of social capital, which are formal social networks, informal social networks, government connection, and general trust. We illustrate that social capital is abundant and has positive impacts on household income in rural Vietnam. Among many dimensions of social capital, political and governmental connectivity is fundamentally essential for improving household income. Approaching governmental organizations through the friend network is much more effective than the relative network or family member network. This study provides evidence that informal network is also important. Connecting to the community through the participation of wedding ceremonies increases spiritual well-being and works as a type of social capital to increase household income. Surprisingly, we find no positive impact of general trust and other massive organizations, which are often claimed to be necessary, such as the Farmer Association or the Women Association.