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With Aditi Bhowmick (Harvard University), Maurizio Bussolo (World Bank), Vidisha Mehta (Development Data Lab), and Paul Novosad (Dartmouth College) Abstract: Cultural capital — defined in this paper as specific human capital that lowers the cost of cooperating with elites who have disproportionate control over resources — has long been a major topic of research in sociology. Economics has been slow to study this concept because of the difficulty in measuring cultural capital and in finding suitable empirical settings to study its effects. Leveraging novel data on the cultural norms of each of India’s nearly 5,000 endogamous social groups (castes, tribes, etc.), we generate a new measure of cultural capital by calculating the cultural distance between individuals and the economically dominant group in their villages, whose control of land gives them significant power over their neighbor’s economic, social, and political lives. We use a difference-in-differences strategy that compares members of the same group who have differing levels of cultural capital due to differences in the dominant group across villages. We find that individuals living in villages with culturally distant dominant groups experience large reductions in educational attainment, health, consumption, and income per capita. We find evidence of discrimination, although other channels such as trust and communication frictions may also be factors.

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