Social capital can help reduce adverse shocks by facilitating access to transfers and remittances. This study examines how various measures of social capital are associated with disaster recovery after the 2008 Sichuan earthquake. It finds that households having a larger Spring Festival network in 2008 do better in housing reconstruction. A larger network significantly increases the amount of government aid received for housing reconstruction. Furthermore, households having larger networks receive monetary and material support from more people, which also explains the positive impacts on recovery from the earthquake. As for other measures of social capital, connections with government officials and communist party membership do not significantly contribute to disaster recovery. Human capital, measured by the years of schooling of household head, is not positively correlated with housing reconstruction.
The study shows that social capital is important for housing reconstruction after the Sichuan earthquake in 2008. Expanding the size of Spring Festival network by 10 in 2008 raises the likelihood of housing reconstruction by 0.014. A larger network channels more housing subsidy to the households, provides support for building temporary housing, as well as offers direct monetary and material transfer after the earthquake, which are crucial for reconstructing houses. Yet the role of network as an information channel of government recovery program is not significant. The two other measures of social capital, connection with government officials and communist party membership do not show significant impacts on housing reconstruction. Also, our results do not show significant impacts of these two measures on most of the channel variables.
Amount of wealth possessed prior to the earthquake is crucial for reconstructing houses, since households need to self-finance the rest of the rebuilding cost not covered by government subsidy and loan. Furthermore, higher education of household head and possession of technical license do not have significant effect. Being impoverished or under the protection of wubao/dibao is not significantly disadvantaged for housing reconstruction.
Finally, the results show significant positive correlation between housing damage and housing reconstruction, and the significance still remains after controlling for the receipt of government aid. One possible explanation is that houses having been destroyed during the earthquake may be substandard in quality, and the households may just reconstruct another low-quality house, which requires a shorter time to reconstruct.
The research on social capital is still emerging in economic literature and we are still finding a commonly recognized measure of social capital for the empirical study. The measure should be cultural specific and designed according to the context of the study. At this point, Chinese sociologists are still discussing the most appropriate measure of social capital in Chinese rural society. Our study focuses on size of Spring Festival network, communist party membership as well as connection with government officials. Yet more efforts should be devoted to developing an appropriate measure in the context of disaster recovery in rural economies of China.
Social capital substantially facilitates disaster recovery for rural households and plays an even more important role than education. The impact of social network is even more paramount in China, where the workings of society are primarily operated on relationship. Our findings raise an important concern: Among all the disaster-affected house- holds, the isolated groups in rural areas with small social networks are especially vulnerable. They obtain less support from the government and suffer a slower pace of recovery. A proper targeting of government relief and rehabilitation aid should not just focus on the damage suffered by the households, but also their access to social capital.
