Does social capital determine health? Evidence from eight transition countries.

There is growing interest in the role of social relationships in explaining patterns of health. We contribute to this debate by investigating the impact of social capital on self-reported health for eight countries from the Commonwealth of Independent States. We rely on three indicators of social capital at the individual level (trust, participation in local organisations, social isolation) and employ alternative procedures to estimate consistently the impact of social capital on health. The three social capital indicators are choice variables and are hence, by definition, endogenously determined. We attempt to circumvent the endogeneity problems by using instrumental variable estimates. Our results show that the individual degree of trust is positively and significantly correlated with health, this being true with least squares estimators as well as when relying on instrumental variable estimators with (and without) community fixed effects. Similarly, social isolation is negatively and significantly associated with health, irrespective of the procedure of estimation. On the other hand, the effect of being a member of a Putnamesque organisation is more ambiguous and usually not significantly related to health.