| Summary: | We examine the extent to which social networks among indigenous peoples in Mexico have a significant effect on a variety of human capital investment and economic activities, such as school attendance and work among teenage boys and girls, and migration, welfare participation, employment status, occupation, and sector of employment among adult males and females. Using data from the 10 percent population sample of the 2000 Population and Housing Census of Mexico and the empirical strategy that Bertrand, Luttmer, and Mullainathan (2000) propose, which allows us to take into account the role of municipality and language group fixed effects, we confirm empirically that social network effects play an important role in the economic decisions of indigenous people, especially in rural areas. Our analysis also provides evidence that better access to basic services such as water and electricity increases the size and strength of network effects in rural areas.
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