NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

How Much is Social Capital Worth?

John F. Helliwell, Christopher P. Barrington-Leigh

NBER Working Paper No. 16025
Issued in May 2010
NBER Program(s):   PE   POL

This paper uses data from global and Canadian surveys data to estimate the powerful linkages between social connections, their related social identities, and subjective well-being. Our explanatory variables include several measures of the extent and frequency of use of social networks, combined with a number of measures of general and domain-specific trust, which are often used to gauge effective social capital. Using these measures we find that trust and social network size and use are all strong predictors of subjective well-being. We demonstrate the size and impact of these effects by calculating compensating differentials, measured as the changes in household income that would produce equivalent levels of life satisfaction.

We introduce three key measures of social identity - the respondents' sense of belonging to their communities, province and country - and find that they add significantly to the explanation of life satisfaction among Canadian respondents, and provide important mediating channels whereby social capital is linked to subjective well-being.

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A data appendix is available at http://www.nber.org/data-appendix/w16025

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Document Object Identifier (DOI): 10.3386/w16025

Published: How Much Is Social Capital Worth? John F. Helliwell and Christopher P. Barrington-Leigh In J. Jetten, C. Haslam and S.A. Haslam, eds., The Social Cure, London: Psychology Press, pp. 55-71. A version is available as NBER working paper 16025 and appendix.

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