Developing a Social Capital Index for the Netherlands

This paper integrates a set of independent social capital indicators into one index by using structural equation modeling (SEM) based on partial least squares estimation (PLS). The social capital index consists of two dimensions: participation and trust. In each of the two dimensions, three levels are distinguished: social (micro), organizational (meso), and political (macro). The main objectives of the index are to: (1) provide a coherent overview of social capital in the Netherlands; (2) monitor social capital over time; and (3) compare subpopulations. A broad spectrum of indicators is included, however, these are only weakly correlated and consequently treated as distinct. Therefore, traditional index development methods such as factor analysis and reflective modeling cannot be applied. Consequently, formative modeling in which the indicators are specified as causes rather than as effects is used. We employ the Permanent Survey on Living Conditions 2009 (POLS), administered face-to-face to 7,560 respondents in the Netherlands. We find that the index predicts well-being and health, which demonstrates nomological validity. Subsequently, bootstrapping is conducted to test the robustness of the index. And the 2009 index is replicated based on the 2010 POLS data. The replication shows that the 2009 model is relatively stable and results are robust. Finally, the model is extended by including volunteering and informal help, which changes the model but the results remain largely the same. This index, which is shown to be valid and robust, contributes to a further understanding of the concept of social capital.