Does social capital help in post-disaster recovery? Evidence from the Gorkha earthquake of Nepal

In 2015, a 7.8 magnitude earthquake struck Nepal that claimed around 9000 lives and destroyed more than 800,000 homes. While a few systematic economic assessment studies of this disaster have been conducted, most do not provide a comprehensive analysis that encompasses economic as well as non-economic dimensions. We consider housing, food, water availability, and a permanent source of income as our recovery measures. Using data from a 2017 field survey, this chapter examines the critical role of social capital in post-disaster recovery and highlights the fact that social infrastructure drives resilience. The empirical estimates from an ordered logit model show that of the financial capital measures wealth positively affects only housing while borrowing affects all recovery measures except housing. Similarly, social capital measures positively influence all recovery measures except housing; the effect is more pronounced for volunteering (bridging social capital) than family status and number of friends (bonding social capital). Combining individual measures to create two composite indices, we find that the social capital index is at least as effective as the financial capital index in post-earthquake recovery.