Embedding in the Community: Nativity, Homeownership and Social Capital in Ireland Embedding in the Community: Nativity, Homeownership and Social Capital in Ireland Dinali Wijeratne J.E. Cairnes School of Business & Economics NUI Galway Dinali Wijeratne April 20121

Motivation Between 1996 and 2006 the foreign born population in Ireland increased dramatically from 178,347 (5 percent) to 533,165 (13 percent) This rapid growth has lead to concerns of weakening social bonds potentially undermining social capital of Irish society this paper explores the interaction between nativity, homeownership and social capital. Literature in social capital highlights positive impact on social capital from homeownership – this paper explores the interaction between nativity, homeownership and social capital. Dinali Wijeratne April 20122

Research Questions – How does nativity affect homeownership? – How do nativity and homeownership affect social capital? – Does homeownership have a differential effect on social capital for the foreign born? Dinali Wijeratne Aug Dinali Wijeratne April 2012

Related Literature DiPasquale, Denise and Glaser, Edward. (1999) “Incentives and Social Capital: Are homeowners better Citizens? Journal of Urban Economics 45, Putnam, R, “E-Pluribus Unum: Diversity and community in the Twenty-first Century”, 2006 Johan Skytte Prize Lecture Glaeser, Edward and Sacerdote, Bruce; (2000), “The Social Consequences of Housing” National Bureau of Economic Research (NBER), W/P 8034 Dinali Wijeratne April 20124

Method Prob (Homeownership)=f( Nativity, Controls) Prob (Volunteering) =f (Nativity, Homeownership, Nativity*Homeownership) Dinali Wijeratne April 20125

Data Census of Population 2006 Sample of Anonymised Records (COPSAR) micro data - 5 percent sample from each county Includes approximately 200,000 observations with demographic and socio-economic related variables with a rich data set. Dinali Wijeratne April 20126

Social capital.... ‘Voluntary’ variable in the data set was used to decide whether people over the age of 15 years were involved in any form of social welfare/community services. For this purpose there were few voluntary activities listed in the questionnaire i.e. charity, religious, sports, political or cultural or any other voluntary activity. For the purpose of our binary probit model a dummy variable was created to represent the social capital variable - “Yes=1” if an individual was involved in any of the mentioned volunteering activity or “No=0” if the person didn’t get involved in any volunteering. Dinali Wijeratne April 20127

Descriptive Statistics Dinali Wijeratne April 20128

ResultsHomeownership 9

Results –Homeownership Overall, the regression performs well, with the demographic and educational controls, statistically significant and signed as expected. The probability of homeownership increases with age, rural residence, being female, being married (and not separated), and being widowed. Homeownership also increases with educational attainment. Dinali Wijeratne Aug Dinali Wijeratne April 2012

Dinali Wijeratne Aug Dinali Wijeratne April 2012

Dinali Wijeratne Aug N = Note - the numbers in parentheses are standard errors ***significant at 1 percent level **significant at 5 percent *significant at 10 percent level 12Dinali Wijeratne April 2012

Results Social Capital Dinali Wijeratne April

Dinali Wijeratne Aug Dinali Wijeratne April 2012

Dinali Wijeratne Aug N = Note - the numbers in parentheses are standard errors ***significant at 1 percent level **significant at 5 percent *significant at 10 percent level 15Dinali Wijeratne April 2012

Conclusions Foreign-born less likely to be homeowners, although gap declines with years of residence Homeowners more likely to volunteer Dinali Wijeratne Aug Dinali Wijeratne April 2012

Conclusions But no evidence that the foreign-born are less likely to volunteer controlling for other factors Being a homeowner does not appear to have influenced the volunteering activity of the foreign born. Dinali Wijeratne Aug Dinali Wijeratne April 2012

Dinali Wijeratne Aug 2011 Limitations/Future Work Instrument - for Homeownership to overcome the causality problem (Y causes X ?) Cross sectional data...to overcome household level heterogeneity -the omitted variable bias use a different longitudinal panel dataset (i.e each entity[individual] is observed more than once) 18 Dinali Wijeratne April 2012

THANK YOU! QUESTIONS? 19