BHPS-2009 Conference: the 2009 British Household Panel Survey Research Conference, 9-11 July 2009, Colchester, UK
June 1, 2009
It is increasingly recognised that an individual's social capital may be an important
determinant of their health, alongside their human and financial capital. This paper
presents new evidence on the importance of social networks for individuals (mental and
physical) health in retirement using data from the British Household Panel Survey.
Since 1991 this survey has collected detailed information on individuals social networks
(organisational membership and contact with friends) and a range of indicators of
physical health (self-assessed health status, specific health problems and mortality) and
mental health (general health questionnaire and life satisfaction). The length of the
panel allows us to explore in detail the dynamics of the evolving relationship between
social networks and health in retirement.
Identifying a causal effect of social networks on health is complicated by the fact that
health is likely to be a key determinant of social participation. We address this in the
First, we condition on an individuals health and social capital at retirement and compare
the evolution of health during retirement across individuals with ‘low’ and ‘high’ social
capital and ‘good’ and ‘bad’ health. In the BHPS we observe individuals in each year
for up to ten years in retirement allowing us to map the evolution of health outcomes.
Second, we use an instrumental variables approach. Following Glaeser, Laibson and
Sacerdote (2002), our instruments are derived from a model in which social networks
arise from individual investment decisions and include factors that affect the
costs/benefits of social network formation for individuals (but not directly health
outcomes), including tenure in current residence, probability of moving, and social
network characteristics of the local neighbourhood.
Finally, we explore a number of possible mechanisms through which social networks
may affect health outcomes - including mitigating the effect of stressful events such as
widow(er)hood, providing information and peer effects that reinforce healthy behaviour
such as health check-ups, as well as direct effects on specific health outcomes.