Promoting Subjective Well-Being among Rural and Urban Residents in Indonesia: Does Social Capital Matter?

Tri Wahyu Nugroho,Sujarwo Sujarwo,Hery Toiba,Nuhfil Hanani

doi:10.3390/su14042375

Abstract

There has been growing research on the link between social capital and subjective well-being. However, to date, research investigating the impact of social capital on subjective well-being based on urban and rural typology is limited. Therefore, to fill this gap, this study aims to examine the effects of social capital on subjective well-being, based on urban and rural typology, using large-scale data from 29,341 Indonesian residents, comprising 17,155 urban residents and 12,186 rural residents. A two-stage predictor substitution (2SPS) approach is applied to address the endogeneity issue in estimating the impact of social capital. The empirical findings indicate that social capital significantly increases subjective well-being, i.e., happiness and life satisfaction. However, based on the urban–rural model, we found that the impact of social capital on subjective well-being is different. In the urban model, social capital increases happiness and life satisfaction significantly. However, the rural model indicates that social capital significantly increases happiness, not life satisfaction. These findings imply that subjective well-being impacts urban residents more than rural residents. The main reason is social capital in urban areas is well-developed (i.e., management and infrastructure for community association). Therefore, we suggest developing social capital in rural areas to expand its role in improving well-being.

Highlights

Over the last few decades, governments and researchers have made considerable efforts to reduce global poverty
The results indicate that social capital is positively and significantly influenced by age, marital status, having a child under 15 years old, health status, income, and TV ownership, and it is negatively affected by the education level
This study aims to estimate the impact of social capital on subjective well-being based on urban and rural typologies

Summary

Introduction

Over the last few decades, governments and researchers have made considerable efforts to reduce global poverty. It is no wonder that the first sustainable development goals (SDGs) of the United Nations focus on eradicating poverty. In 2020, the global poverty rate increased to around 119–124 million, suggesting that the efforts have not been fruitful. Researchers have been studying subjective well-being to reduce poverty, since it is a more reasonable measure of the level of personal welfare [1]. The findings have not been conclusive [2].

Objectives

Methods

Results

Discussion

Conclusion