In order to answer this question, a brief definition of social studies is necessary. Social studies is the study of social sciences and humanities for the promotion of civic competence. If we take this statement as the goal of social studies, we will be able to see that children's literature can help in many ways.
First, by studying children's literature from different part of the world, you will be able to make many point on the richness of our world. More importantly, you will be able to speak of diversity among different culture and children. This alone is a valuable lesson.
Second, good children's literature can communicate complex points in simple ways that will engage children and adult alike. For example, the Giving Tree by Shel Silverstein is a perfect example. Just sheer simplicity of the book teaches children and adults the beauty of giving. If we could all learn something from this book, then our society would be a better place.
Third, you can even try to read books written by children. This might give a different perspective as well. You will be able to show that children can make a difference in society as well.