Keep your friends close: The effect of local social networks on child human capital outcomes

Social networks can affect demand for human capital investments by relaxing household time or budget constraints or by defining and reinforcing human capital preferences. However, empirically identifying the effect of social networks on human capital investment is usually problematic because households self-select their networks in ways that may be correlated with their abilities to make these investments. In Northern Ugandan Internally Displaced Persons Camps, networks were not entirely self-selected. Rebel activity, which forced households into camps in 2002, disrupted pre-existing social networks in ways that were exogenous to household human capital preferences. This paper uses the exogenous variation in network disruption to identify a positive impact of networks on children's long-term nutritional outcomes. (C) 2013 Elsevier B.V. All rights reserved.