Does social capital determine health? Evidence from eight transition countries

This paper starts from an empirical assessment of different dimensions of social capital in the transition countries of Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS). The level of social capital is lower in CEE-CIS countries compared to other countries in Europe and beyond. We then use a unique data source to carefully investigate the impact of social capital on individual self-reported health for eight countries from the Commonwealth of Independent States (Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Ukraine). We rely on three indicators for social capital – individual degree of trust, participation in local organisations, social isolation – and employ alternative procedures to consistently estimate the impact of social capital on health. We attempt to circumvent the endogeneity problems by using instrumental variable estimates. Our results show that, in the overall sample comprising all eight countries, the individual degree of trust is positively and significantly correlated with health, either in pooling estimation or when we rely on IV estimators with 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 member of a Putnamesque organisation is more ambiguous and usually not significantly related to health. Finally, country-estimates suggest that the impact of social capital on health varies across the eight countries. We argue that the positive effect of membership on health is conditional on the quality of the political institutions and civil liberties, while trust and social isolation seem to influence health independently of those institutional factors.