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The Compensating Income Variation of Social Capital

Author

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  • Wim Groot
  • Henriette Maassen van den Brink
  • Bernard M.S. van Praag

Abstract

There is a small but growing literature on the determinants of social capital. Most of these studies use a measure of trust to define social capital empirically. In this paper we use three different measures of social capital: the size of the individual’s social network, the extent of their social safety net and membership of unions or associations. A second contribution to the literature is that we analyze what social capital contributes to our well-being. Based on this, we calculate the compensating income variation of social capital. We find differences in social capital when we differentiate according to individual characteristics such as education, age, place of residence, household composition, and health. Household income generally has a statistically significant effect. We find a significant effect of social capital on life satisfaction. Consequently, the compensating income variation of social capital is substantial.

Suggested Citation

  • Wim Groot & Henriette Maassen van den Brink & Bernard M.S. van Praag, 2007. "The Compensating Income Variation of Social Capital," CESifo Working Paper Series 1889, CESifo.
    • Handle: RePEc:ces:ceswps:_1889
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    References listed on IDEAS

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    14. Wim Groot & Henriëtte van den Brink, 2003. "Sympathy and the Value of Health: The Spill-over Effects of Migraine on Household Well-being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 61(1), pages 97-120, January.
    15. van Praag, B. M. S. & Frijters, P. & Ferrer-i-Carbonell, A., 2003. "The anatomy of subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 29-49, May.
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    Cited by:

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    2. John Stanley & Janet Stanley, 2023. "Improving Appraisal Methodology for Land Use Transport Measures to Reduce Risk of Social Exclusion," Sustainability, MDPI, vol. 15(15), pages 1-18, August.
    3. Matthias Jan Mrożewski & Daphne Hering, 2023. "What makes migrants more entrepreneurial? Investigating the role of cultural distance and human capital," International Entrepreneurship and Management Journal, Springer, vol. 19(1), pages 151-176, March.
    4. Cheung, Chau-kiu & Ng, Sik Hung, 2012. "Impacts of financial crisis on social engagement in Hong Kong," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 623-632.
    5. Rainer Winkelmann, 2009. "Unemployment, Social Capital, and Subjective Well-Being," Journal of Happiness Studies, Springer, vol. 10(4), pages 421-430, August.
    6. Tetine Sentell & Joy Agner & Ruth Pitt & James Davis & Mary Guo & Elizabeth McFarlane, 2020. "Considering Health Literacy, Health Decision Making, and Health Communication in the Social Networks of Vulnerable New Mothers in Hawai‘i: A Pilot Feasibility Study," IJERPH, MDPI, vol. 17(7), pages 1-17, March.
    7. Rati Ram, 2010. "Social Capital and Happiness: Additional Cross-Country Evidence," Journal of Happiness Studies, Springer, vol. 11(4), pages 409-418, August.
    8. Ásgeirsdóttir, Tinna Laufey & Hardardottir, Hjördis & Jonbjarnardóttir, Brynja, 2023. "Putting a price on pain: The monetary compensation needed to offset welfare losses due to violence," Social Science & Medicine, Elsevier, vol. 336(C).
    9. Mendolia, Silvia & McNamee, Paul & Yerokhin, Oleg, 2018. "The Transmission of Mental Health within Households: Does One Partner's Mental Health Influence the Other Partner's Life Satisfaction?," IZA Discussion Papers 11431, Institute of Labor Economics (IZA).
    10. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    11. Christian Bjørnskov & Kim Sønderskov, 2013. "Is Social Capital a Good Concept?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 114(3), pages 1225-1242, December.
    12. Byoung-Jin Jeon & Kang-Hyun Park, 2022. "The Impact of Social Network Characteristics on Health among Community-Dwelling Older Adults in Korea: Application of Social Network Analysis," IJERPH, MDPI, vol. 19(7), pages 1-9, March.
    13. Holford, Angus J. & Pudney, Stephen, 2015. "Survey Design and the Determinants of Subjective Wellbeing: An Experimental Analysis," IZA Discussion Papers 8760, Institute of Labor Economics (IZA).
    14. Patel, Pankaj C. & Tsionas, Mike G. & Oghazi, Pejvak, 2023. "Compensating income variation in health and subjective well-being for the self-employed," Journal of Business Research, Elsevier, vol. 160(C).
    15. Tina Rochelle, 2015. "Diversity and Trust in Hong Kong: An Examination of Tin Shui Wai, Hong Kong’s ‘City of Sadness’," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(2), pages 437-454, January.
    16. Nagamani Subramanian & M. Suresh, 2022. "Social Sustainability Factors Influencing the Implementation of Sustainable HRM in Manufacturing SMEs," Humanistic Management Journal, Springer, vol. 7(3), pages 469-507, December.
    17. Pudney, Stephen & Hancock, Ruth & Morciano, Marcello, 2013. "Nonparametric estimation of a compensating variation: the cost of disability," ISER Working Paper Series 2013-26, Institute for Social and Economic Research.
    18. Fidrmuc, Jan & Gërxhani, Klarita, 2008. "Mind the gap! Social capital, East and West," Journal of Comparative Economics, Elsevier, vol. 36(2), pages 264-286, June.
    19. Yihan Guo & Junling Xu & Yuan Zhou, 2022. "Effects of Internet Adoption on Health and Subjective Well-Being of the Internal Migrants in China," IJERPH, MDPI, vol. 19(21), pages 1-15, November.
    20. Silvana Miceli & Laura Maniscalco & Domenica Matranga, 2019. "Social networks and social activities promote cognitive functioning in both concurrent and prospective time: evidence from the SHARE survey," European Journal of Ageing, Springer, vol. 16(2), pages 145-154, June.
    21. Holford, Angus & Pudney, Stephen, 2014. "Survey design and the determinants of subjective wellbeing: an experimental analysis," Understanding Society Working Paper Series 2014-06, Understanding Society at the Institute for Social and Economic Research.
    22. McNamee, Paul & Mendolia, Silvia, 2014. "The effect of chronic pain on life satisfaction: Evidence from Australian data," Social Science & Medicine, Elsevier, vol. 121(C), pages 65-73.

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    More about this item

    Keywords

    social capital; life satisfaction;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D6 - Microeconomics - - Welfare Economics

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