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The Compensating Income Variation of Social Capital

Author

Listed:
  • Wim Groot

    (Maastricht University)

  • Henriëtte Maassen van den Brink

    (University of Amsterdam)

  • Bernard M.S. van Praag

    (University of Amsterdam)

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. This working paper has resulted in a publication in Social Indicators Research , 2007, 82(2), 189-207.

Suggested Citation

  • Wim Groot & Henriëtte Maassen van den Brink & Bernard M.S. van Praag, 2007. "The Compensating Income Variation of Social Capital," Tinbergen Institute Discussion Papers 07-050/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20070050
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    References listed on IDEAS

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    6. 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.
    7. 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.
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    9. 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).
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    11. 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.
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    13. 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.
    14. 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.
    15. Maria C. Pereira & Filipe Coelho & Óscar Lourenço, 2017. "Who Feels Credit Constrained in Europe? The Role of Social Capital," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(2), pages 380-405, July.
    16. Rati Ram, 2010. "Social Capital and Happiness: Additional Cross-Country Evidence," Journal of Happiness Studies, Springer, vol. 11(4), pages 409-418, August.
    17. 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).
    18. 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).
    19. 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).
    20. 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.
    21. 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.
    22. 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.

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    More about this item

    Keywords

    life satisfaction; social capital;

    JEL classification:

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

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