There is a growing concern about the well-being of children in America and the circumstances that surround their growth and development. One explanation for the social problems that confront young people is a decline in the effectiveness of the social institutions that children rely on for support. The decline in effectiveness leads to a decrease in social ties and resources (social capital) that children require to develop into productive adults. This paper presents an overview of social capital, with a focus on the social and cognitive development of children, and what is known about how social capital influences these processes in schools. The paper begins by laying out how others have defined social capital, followed by a discussion of how social capital might be tied to the cognitive, social, and moral development of children. The third section reviews the literature that links social capital to educational outcomes. The paper concludes with a discussion of the usefulness of social capital in explaining and addressing the difficulties that confront American children. The concept of social capital highlights an important and often neglected perspective on children's development. However, not all forms of social capital promote cognitive development of positive social and moral outcomes. (Contains 83 references.) (LMI)