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Social Capital and Individual Happiness in Europe

Abstract

This paper explores the relationship between social capital and happiness both in Europe as a whole, as well as in its four main geographical macro-regions—North, South, East and West—separately. We test the hypothesis of whether social capital, in its three-fold definition established by Coleman (Am J Sociol 94:S95–S120 1988)—trust, social interaction, and norms and sanctions—influences individual happiness across European countries and regions. The concept of social capital is further enriched by incorporating Putnam (Making democracy work—civic traditions in modern Italy. Princeton University Press, Princeton, 1993) and Olson (The rise and decline of nations—economic growth, stagflation, and social rigidities. Yale University Press, New Haven and London, 1982) type variables on associational activity. Using ordinal logistic regression analysis on data for 48,583 individuals from 25 European countries, we reach three main findings. First, social capital matters for happiness across the three dimensions considered. Second, the main drivers of the effects of social capital on happiness appear to be informal social interaction and general social, as well as institutional trust. And third, there are significant differences in how social capital interacts with happiness across different areas of Europe, with the connection being at is weakest in the Nordic countries.

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Notes

  1. Following the happiness economics literature, this paper uses the terms well-being, life-satisfaction and happiness as synonyms.

  2. We opted for an ordered logistic regression model because of its ability to capture the structure of our assumed generalized reported happiness function, as suggested by Blanchflower and Oswald (2004). An ordered logistic regression (ologit) can be seen as an extension to the logistic regression model. While the latter evaluates binary dependent variables, ologit models take into account dependent variables with more than two response categories ordered in a logical sequence i.e. from very unhappy to very happy. An alternative method would have been to run the regressions using ordinary least squares (OLS). We have conducted such analysis and, when OLS is used, neither the coefficients, nor the significance levels of both the control variables and the variables of social capital in question vary much with respect to the ologit analysis. This is in line with what is predicted by Ferrer-i-Carbonell and Frijters (2004). The OLS results of the analysis can be made available upon request.

  3. Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Germany, Denmark, Estonia, Spain, Finland, France, United Kingdom, Greece, Hungary, Ireland, Latvia, the Netherlands, Poland, Portugal, Romania, Sweden, Slovenia and Slovakia. Russia, Turkey, Norway, Ukraine and Israel (the non-EU members) were dropped from the dataset because of problems in comparability of some of the control variables. Complete datasets for Lithuania, Luxemburg, Italy and Malta were not available.

  4. The reverse causality issue, as explained by Helliwell and Putnam (2004), refers to the possible two-way linkage between happiness and other factors. While one could assume that, say, healthier people are happier than others, one could also argue the opposite, that happier people generally are healthier than unhappy ones.

  5. A similar method was used by Alesina et al. (2004). Instead of using the cluster option, they arbitrarily divided the answers ranging from 1 to 10 into two groups. This method proved to be unsatisfactory for the purpose of our analysis, since the various answers ranging from 1 to 10 are not equally distributed among the observations.

  6. The full results, including the macroeconomic and socio-demographic variables, can be provided upon request.

  7. The 11 happiness categories were divided as follows: 0, 1, 2, very unhappy, 3, 4, 5, fairly happy, 6, 7, happy, 8, 9, 10 very happy. Very happy was chosen to include the three scores 8, 9 and 10 to properly reflect the diversity of European countries when referring to the marginal effects. If only 9, 10 were chosen, only the Nordic countries would have been taken into consideration.

  8. Given that the income comparison variable was only available for one wave of the ESS, for the sake of brevity, these results are not displayed in the paper. However, they can be made available upon request.

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Acknowledgments

We are grateful to the editor of the Journal of Happiness Studies, Antonella delle Fave, its coeditor for economics, Stephanie Rossouw, and a number of anonymous reviewers for their constructive comments and suggestions to successive drafts of this paper. The research leading to this paper would not have been possible without the generous financial support of the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013)/ERC grant agreement no 269868.

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Correspondence to Andrés Rodríguez-Pose.

Appendices

Appendix 1

Description of variables

Variable type Variable Description Range SD Mean Coding
Control Variable Lgdpcap Log of GDP per capita 8.1–11.3 0.5788706 10.10462
 Macroeconomic lgdpcap2 Log of GDP per capita squared 66.1–128.3 1.135.264 10.24384
  Inflation Inflation rate of respective country 1.3–15.3 232.473 3.422532
  Unemployment rate Unemployment rate of respective country 3.1–13.9 239.543 7.049566
  Inequality Gini coefficient (= income inequality) 23.4–37.7 3.874.474 29.00267
Control Variable Gender Gender of respondent 0–1 0.4998242 0.4865488 Male = 1, female = 0
 Socio-demographic Age Age of respondent 15–90 17.55349 47.45001
  Age2 Age of respondent squared 225–8100 1743.515 2559.622
  No edu No education 0–1 0.0663642 0.0044237 Yes = 1, no = 0
  Primary edu Primary Education 0–1 0.230372 0.0562323 Yes = 1, no = 0
  Secondary edu Secondary Education 0–1 0.498551 0.4618946 Yes = 1, no = 0
  Tertiary edu Tertiary Education 0–1 0.4994964 0.4774495 Yes = 1, no = 0
  Very good health Very good health 0–1 0.4159439 0.2225217 Yes = 1, no = 0
  Good health Good health 0–1 0.4978669 0.4538085 Yes = 1, no = 0
  Fair health Fair health 0–1 0.4354426 0.2542488 Yes = 1, no = 0
  Bad health Bad health 0–1 0.2349899 0.0586601 Yes = 1, no = 0
  Very bad health Very bad health 0–1 0.103176 0.0107609 Yes = 1, no = 0
  Unemployed Respondent unemployed 0–1 0.2261212 0.0540513 Yes = 1, no = 0
  Married Marital status: married 0–1 0.4987874 0.5348751 Yes = 1, no = 0
  Couple Marital status: couple 0–1 0.1531499 0.0240319 Yes = 1, no = 0
  Separated Marital status: separated 0–1 0.1171141 0.0139089 Yes = 1, no = 0
  Divorced Marital status: divorced 0–1 0.2742934 0.0819514 Yes = 1, no = 0
  Widowed Marital status: widowed 0–1 0.2666153 0.0770133 Yes = 1, no = 0
  Single Marital status: single 0–1 0.4411016 0.264557 Yes = 1, no = 0
  Big city Domicile: big city 0–1 0.3969727 0.1960002 Yes = 1, no = 0
  Suburb Domicile: suburb of a big city 0–1 0.334481 0.1283486 Yes = 1, no = 0
  Town Domicile: town 0–1 0.4652893 0.3169417 Yes = 1, no = 0
  Village Domicile: village 0–1 0.4541886 0.290914 Yes = 1, no = 0
  Country side Domicile: countryside 0–1 0.2513973 0.0677956 Yes = 1, no = 0
  Political orientation Political orientation of the respondent 0–1 0.4759817 0.290914 Right = 1, left = 0
  Income 1 Household’s total net income, all sources: 1st quantile 0–1 0.3267789 0.1215588 Yes = 1, no = 0
  Income 2 Household’s income: 2nd quintile 0–1 0.407013 0.2095799 Yes = 1, no = 0
  Income 3 Household’s income: 3rd quintile 0–1 0.3977898 0.1970701 Yes = 1, no = 0
  Income 4 Household’s income: 4th quintile 0–1 0.4095151 0.2131188 Yes = 1, no = 0
  Income 5 Household’s income: 5th quintile 0–1 0.3360518 0.1297683 Yes = 1, no = 0
  Income comparison Importance of comparing the own income with other people’s 1–6 1.828237 2.280028 1 = not important 6 = very important
Social capital: trust Trust people Most people can be trusted in dealing with people 0–1 0.4979426 0.4546315 Yes = 1, no = 0
 Social trust Trust legal system Trust in the legal system 0–1 0.4995074 0.4776964 Trust = 1, no trust = 0
  Satisfaction health system Satisfaction with the health system 0–1 0.4999977 0.5027365 Satisfied = 1, unsatisfied = 0
  Satisfaction education system Satisfaction with the education system 0–1 0.4845722 0.6232665 Satisfied = 1, unsatisfied = 0
Social capital: information channels Never meet Meet socially with friends, relatives or work colleagues: never 0–1 0.1171995 0.0139295 Yes = 1, no = 0
 Putnam-type (in)formal social interaction Less than once Meet socially: less than once a month 0–1 0.2565956 0.0708613 Yes = 1, no = 0
  Once a month Meet socially: once a month 0–1 0.2835378 0.0881651 Yes = 1, no = 0
  Several times a month Meet socially: several times a month 0–1 0.3924775 0.1902185 Yes = 1, no = 0
  Once a week Meet socially: once a week 0–1 0.3897904 0.1868442 Yes = 1, no = 0
  Several times a week Meet socially: several times a week 0–1 0.453685 0.2898235 Yes = 1, no = 0
  Everyday Meet socially: everyday 0–1 0.3667563 0.160158 Yes = 1, no = 0
  Voluntary work Participation in voluntary work 0–1 0.4519313 0.2860788 Yes = 1, no = 0
  Church attendance Frequency of church attendance 1–7 2.527015 1.508663 1 = never 2 = less often 3 = only on special holy days 4 = at least once a month 5 = once a week 6 = more than once a week 7 = everyday
  Work political party Work in a political party or action group 0–1 0.2043219 0.0436521 Yes = 1, no = 0
 Olson-type formal social interaction Contacted politician Contacted a politician 0–1 0.3693793 0.1630108 Yes = 1, no = 0
  Worn campaign badge Worn or displayed a campaign badge/sticker 0–1 0.2727716 0.0809568 Yes = 1, no = 0
  Participation demonstration Participation in a lawful demonstration 0–1 0.2515144 0.0678637 Yes = 1, no = 0
  Member trade union Member of a trade union or similar organization 0–1 0.4988599 0.4661783 Yes = 1, no = 0
  Work for professional association Member in a professional association or organization 0–1 0.378035 0.1727501 Yes = 1, no = 0
Social capital: norms and sanctions Feeling of safety Feeling of safety when walking alone outside after dark 0–1 0.4171462 0.7756677 Yes = 1, no = 0
  People fair Most people try to take advantage of you/try to be fair 0–1 0.4318647 0.7519855 Yes = 1, no = 0
  Worry about home How often worry about your home being burgled 0–1 0.4570253 0.2971894 Worry = 1 not worry = 0
  Worry becoming victim How often worry about becoming a victim of violent crime 0–1 0.3952611 0.193778 Worry = 1 not worry = 0

Appendix 2

Number of observations by country and round

Country ESS 2006 ESS 2008
Austria 2,405
Belgium 1,798 1,760
Bulgaria 1,400 2,230
Cyprus 995
Czech Republic 2,018
Germany 2,916 2,751
Denmark 1,505 1,610
Estonia 1,517 1,661
Spain 1,876 2,576
Finland 1,896 2,195
France 1,986 2,073
United Kingdom 2,394 2,352
Greece 2,072
Hungary 1,518 1,544
Ireland 1,800 1,764
Latvia 1,980
Netherlands 1,889 1,778
Poland 1,721 1,619
Portugal 2,222 2,367
Romania 2,146
Sweden 1,927 1,830
Slovenia 1,476 1,286
Slovakia 1,766
  1. Source European Social Survey 2006 and 2008

Appendix 3

Correlation matrix social capital variables

  1 2 3 4 5 6 7 8 9 10 11 12
1 1            
2 0.29 1           
3 0.20 0.27 1          
4 0.19 0.25 0.37 1         
5 −0.05 −0.03 −0.03 −0.02 1        
6 −0.08 −0.07 −0.08 −0.05 −0.03 1       
7 −0.06 −0.05 −0.06 −0.04 −0.04 −0.09 1      
8 −0.01 −0.01 −0.01 −0.02 −0.06 −0.13 −0.15 1     
9 0.01 0.01 0.01 0.02 −0.06 −0.13 −0.15 −0.23 1    
10 0.08 0.08 0.07 0.05 −0.08 −0.18 −0.20 −0.31 −0.31 1   
11 0.01 −0.01 0.02 0.01 −0.05 −0.12 −0.14 −0.21 −0.21 −0.28 1  
12 0.03 0.03 0.02 0.01 −0.01 −0.02 −0.01 0.00 0.00 0.02 0.02 1
13 0.05 0.05 0.02 0.00 −0.02 −0.03 −0.03 −0.02 0.00 0.03 0.03 0.28
14 0.07 0.06 0.04 0.03 −0.02 −0.05 −0.04 −0.02 −0.01 0.04 0.05 0.26
15 0.03 0.01 0.01 −0.04 −0.02 −0.03 −0.03 −0.01 −0.02 0.03 0.05 0.19
16 0.10 0.10 0.06 0.07 −0.05 −0.08 −0.05 −0.02 −0.01 0.07 0.06 0.14
17 −0.04 −0.03 −0.06 0.02 0.01 0.04 0.04 0.01 0.02 −0.05 −0.03 0.02
18 0.10 0.07 0.02 0.07 −0.01 0.01 0.04 0.03 0.03 −0.02 −0.08 0.05
19 0.15 0.14 0.10 0.05 −0.04 −0.08 −0.05 −0.01 −0.01 0.08 0.04 0.24
20 0.15 0.13 0.13 0.10 −0.04 −0.05 −0.03 0.00 0.01 0.05 0.01 0.03
21 0.35 0.20 0.17 0.15 −0.06 −0.09 −0.05 0.01 0.02 0.07 0.00 0.01
22 −0.12 −0.07 −0.05 −0.06 0.02 0.01 0.02 0.01 0.01 −0.03 −0.01 0.00
23 −0.12 −0.09 −0.05 −0.07 0.03 0.01 0.01 −0.01 −0.01 −0.03 0.03 −0.01
  13 14 15 16 17 18 19 20 21 22 23
1            
2            
3            
4            
5            
6            
7            
8            
9            
10            
11            
12            
13 1           
14 0.18 1          
15 0.13 0.27 1         
16 0.18 0.13 0.08 1        
17 0.03 0.00 −0.04 0.10 1       
18 0.08 0.07 0.02 0.04 −0.05 1      
19 0.27 0.25 0.16 0.34 0.01 0.12 1     
20 0.05 0.03 0.02 0.07 −0.04 0.03 0.09 1    
21 0.02 0.04 0.02 0.08 −0.05 0.06 0.10 0.12 1   
22 0.01 −0.01 0.00 −0.01 0.02 0.00 −0.02 −0.26 −0.08 1  
23 −0.02 0.00 0.02 −0.03 0.01 −0.03 −0.04 −0.28 −0.10 0.42 1
  1. 1 trust people 2 trust legal system 3 satisfaction health system 4 satisfaction education system 5 never meet 6 less than once 7 once a month 8 several times a month 9 once a week 10 several times a week 11 everyday 12 work political party 13 contacted politician 14 worn campaign badge 15 participation demonstration 16 voluntary work 17 church attendance 18 member trade union 19 work for professional association 20 feeling of safety 21 people fair 22 worry about home 23 worry becoming victim
  2. Italic values correlation between 0.3 and 0.4, Bold value Correlation between 0.4 and 0.5

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Rodríguez-Pose, A., von Berlepsch, V. Social Capital and Individual Happiness in Europe. J Happiness Stud 15, 357–386 (2014). https://doi.org/10.1007/s10902-013-9426-y

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  • DOI: https://doi.org/10.1007/s10902-013-9426-y

Keywords

  • Social capital
  • Happiness
  • Trust
  • Social interaction
  • Norms and effective sanctions
  • Europe