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Abstract: Based on the argument in both economic and sociological literature that religion is conducive to children’s human capital formation, this paper provides a model of religious participation and explores a mechanism that “social capital” affects children’s education, a la Coleman [Coleman, J.S., 1988. Social capital in the creation of human capital. American Journal of Sociology 94, S95–S120]. The model generates several interesting implications, which help explain some important stylized facts about education and religion. Further, in a dynamic setting, the model shows that there exists a steady state in which individuals allocate a positive amount of time and resources to religious activities. Thus, it complements the existing literature to explain why seemingly unproductive religions can be everlasting. [Copyright &y& Elsevier]

Abstract: This paper proposes three models of social capital and growth that incorporate different perspectives on the concept of social capital and the empirical evidence gathered to date. In these models, social capital impacts growth by assisting in the accumulation of human capital, by affecting financial development through its effects on collective trust and social norms, and by facilitating networking between firms that result in the creation and diffusion of business and technological innovations. We solve for the optimal allocation of resources channelled into the building of social capital, examine the models’ comparative statics and dynamics, and demonstrate how a tax and subsidy scheme may correct the resource under-allocation that results from the public good aspect of social capital creation. Observed differences in social capital across countries are explained by differences in government policies and the possibility of multiple equilibria and social capital poverty traps. [Copyright &y& Elsevier]