Targeted poverty reduction under new structure

Purpose - The purpose of this paper is to investigate the impact of social capital on the mental health of older adults in rural China. The authors also examine potential heterogeneous effects and two possible pathways from social capital increase to mental health improvement. Design/methodology/approach - Based on a panel data of China Health and Retirement Longitudinal Study, this paper employs a fixed effect model to examine the impact of social capital on health. A two-stage instrumental variable approach is adopted to alleviate the issue of endogeneity. Findings - Results demonstrate that social capital has improved the mental health of older adults in rural China significantly. The beneficial effect is stronger for female, people with lower income, aged people and mainly observed in the central and western regions. Social capital affects the mental health of rural older adults through raising the awareness of healthy behavior and lowering the searching cost of health-related information. Practical implications - Social capital plays a vital role in improving the mental health of older adults in rural China and is necessary for the construction of beautiful countryside in China. The authority should increase the investment in both the hard and soft infrastructure to improve the mental health of rural residents and narrow the inequality in health status. Originality/value - This study enriches the empirical literature on the relationship between social capital and mental health by providing new evidence from China. Also, we choose the social activities and communications of individuals to construct a standardized index for social capital, which can better capture the social capital at the individual level.