Social capital and economics

11 Oct 2018

Social capital is an emerging theme in economics research. In new published research in the journal Empirical Economics, ‘Social Capital: exploring the theory and empirical divide’,  Professor Brenda Gannon and colleague Professor Jennifer Sheffield have published new research on social capital in an economics framework. The concept remains a controversial concept, not least because it is difficult to measure and aligning it with theoretical concepts has proven difficult in previous literature. Moreover, much of that research simply measures social capital in binary concepts, for example participation in volunteering.

Now, using new rich data from the Survey of Health Ageing and Retirement in Europe, they undertake analyses using several concepts and align it more appropriately with theory. Four new constructs are developed and then patterns of health outcomes, such as self-reported health, depression, life satisfaction and quality of life. Their findings demonstrate strong associations between these dimensions and health, but nonetheless a dark side is revealed – people with strong household ties, e.g. providing help or care in the household is negatively related to health outcomes.

The main take home message from this work is that social capital is a combination of many dimensions, this should be accounted for in empirical work and furthermore, potential negative effects of social capital need to be also explored.

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