Foreclosure Risk and Community Health: Does Social Capital Have a Protective Effect?

Abstract

This study draws upon the social determinants of health framework to model and test the extent to which a community’s social capital is health protective in the face of a substantial economic shock, namely the recent foreclosure crisis. U.S. county–level data are used to analyze potential moderating effects of social capital on health given a community’s foreclosure risk. We rely upon established social capital measures for U.S counties and merge them with county level foreclosure risk scores constructed by the U.S. Department of Housing and Urban Development (HUD). While theorists suggest that social capital’s effect on health and other outcomes may be durable over time there have been few empirical tests of this. We interact established social capital indicators measured at two points in time with foreclosure risk to predict overall self‐reported health. Our results provide strong support suggesting that high levels of social capital are health protective. Communities with high levels of social capital that are facing high foreclosure risks report significantly better aggregate health outcomes than comparable communities facing the same level of foreclosure risk, but lower levels of social capital.