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Scholars theorize that social contacts affect the productivity of individuals and groups. Robert Putnam claims to have found support for this theory in his studies of Italy and the United States. In each case he concludes that the presence of social capital - generalized norms of trust and reciprocity - is sufficient to predict progress on a variety of social indicators. Using demographic and public opinion data collected at the state level in the U.S, Putnam links the performance of schools to his measure of social capital. Schools perform best where social capital is found in greater abundance. This paper attempts to replicate Putnam’s finding using data from local communities in North Carolina. Since social contacts and social capital occur at the local level between individuals and groups in a community, a logical extension of Putnam’s work is to verify that these relationships exist locally. I propose and test the following two hypotheses using data from the 100 counties of North Carolina: 1) Students score higher on statewide tests in school districts where social contact is greater among residents; 2) Students drop out of school at lower rates in school districts where social contact is greater among residents. If local evidence exists to support the claim that social contacts matter, then what programs governments fund in the name of social progress may need to be reconsidered. [ABSTRACT FROM AUTHOR]