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Benefits of Bowling Alone

Too much social capital can be a bad thing, keeping people rooted where they are instead of encouraging them to follow the jobs.
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Thanks to Robert Putnam, we tend to think amassing social capital is a good thing to do. Thanks to Sean Safford, we know that too much of a good thing can do a world of harm. Can a community have too much trust? Europe's geographic mobility problem:

According to documents seen by the Financial Times, the E.U. is working on plans to combat the problem by extending the period during which economic migrants can receive unemployment benefits from their home country from three months to six months.

This, it is hoped, will make it easier for citizens to move around the bloc in search of work, a development Patrick De Maeseneire, Adecco’s chief executive, said would be crucial to a European economic recovery.

“To create new jobs in Europe, European governments need more flexible labor markets, and to push reforms of education systems. With three million open jobs in Europe, there is a clear need for young people to become internationally mobile in their job search,” he said.

A talent shortage in Germany and an unemployment crisis in Spain should inform a migration from Spain to Germany. For some reason, such a relocation isn't happening often enough. The above policy aims to fix that. Economist Enrico Moretti contrasts Europe with the more mobile United States:

In Italy, where I grew up, most people spend their entire lives in the city where they were born, which is often the city where their parents were born. Young Italians are particularly immobile. In a study published in 2005, I calculated that Italians tend to live with their parents until quite late in life: 83 percent of Italian males 33 or younger still live at home. And when they do leave the parental nest, they don't move far away. Young people commonly get an apartment in the same neighborhood as their parents, often in the same building. Though Italians may be an extreme case, Europeans are generally much more geographically rooted than Americans. Compared with people in most other developed nations, Americans are outliers. The Great Recession has temporarily slowed Americans' mobility, but once the economy rebounds, people will start moving again.

In the United States, people are starting to move again. But the population boom isn't boosting the economy like it used to do. An aging nation may have something to do with it. Again, Moretti with interesting observations about migration:

Among Americans, however, there are large differences, with some groups much more willing to move than others. At the time of the Great Migration in the 1920s—when more than two million African-Americans abandoned the South for industrial centers in other regions—less-educated individuals were more likely to migrate in search of better lives. Today, the opposite is true: The more education a person has, the more mobile he or she is. College graduates have the highest mobility of all, workers with a community-college education are less mobile, high-school graduates are even less, and dropouts are the least mobile of all.

Compared to the Great Migration, the contemporary relationship between geographic mobility and education has flipped. As I argued yesterday, migrants make cities great. You didn't need a high school diploma to help build Chicago. For the poor in the rural South, there was considerable opportunity in the urban North. When more people move, more people benefit economically. The economy benefits, too.

Disturbing findings about how home-ownership affects mobility:

Second, we show that, both within states and across states, high home-ownership areas have lower labor mobility. Importantly, this is not due merely to the personal characteristics of owners and renters. We are unable, in this paper, to say exactly why, or to give a complete explanation for the patterns that are found, but our study’s results are consistent with the unusual idea that the housing market can create dampening externalities upon the labor market and the economy.

Why does home ownership lower labor mobility? That's an open question. I have a theory: too much social capital.

Europe suffers from too much social capital, too much trust. The rooted are parochial, risk averse. Greater density or cheaper housing won't help. Hence the need for the European Union to catalyze more labor movement between member countries.

Owning a home deepens your ties to the community. Home-ownership is promoted as a means to revitalize a neighborhood, make it more safe. Home owners are better neighbors than renters. More home owners generate more social capital. Less people are bowling alone. Less people are moving to where the jobs are.

A reminder about what Thomas Dyja said about Chicago:

Very few people in the book are from Chicago, or born there. Not Studs Terkel. Not Muddy Waters. Not Nelson Algren. So many people who are really important look at Chicago as a place to try out new ideas. You went west and started afresh in Chicago. That pioneer spirit, that entrepreneurial edge, has always been built into Chicago.

Chicago, like other global cities, is a place with low social capital. That pioneer spirit comes from bowling alone, moving to a place full of outsiders. Less social capital, not greater density, means more innovation.