Urban Sprawl and Social Capital: Evidence from Indonesian Cities.

The article investigates how variation in population density within Indonesian urban areas causally affects different dimensions of social capital, including trust in neighbors, community participation, social insurance, and interethnic tolerance. Using detailed data from the 2012 National Socioeconomic Survey (Susenas) and the Indonesia Family Life Survey (IFLS), the study addresses key identification challenges—simultaneity and sorting—by instrumenting density with deep soil characteristics and controlling for community-level averages of individual traits. The findings indicate that higher density reduces trust in neighbors and community participation but does not robustly affect intergroup tolerance once sorting is accounted for; moreover, the negative effects of density on social capital are stronger among higher-income and more educated individuals and are amplified in cities with higher crime rates. These results contribute to understanding the social externalities of urban sprawl in lower-middle income countries and highlight the complexity of policy trade-offs related to urban density and social cohesion.