Social Capital or Social Cohesion: What Matters For Subjective Well-Being?

The theoretical analysis of the concepts of social capital and of social cohesion shows that social capital should be considered
as a micro concept whereas social cohesion, being a broader concept than social capital, is a more appropriate concept for
macro analysis. Therefore, we suggest that data on the individual level should only be used to analyze the relationship between
social capital, social cohesion indicators and subjective well-being and that they do not allow commenting on the level of
social cohesion in a society. For this last type of analyses aggregated indicators of social cohesion have to be computed
which is not the issue of this paper. Our empirical analysis is based on individual data for Luxembourg in 2008. In general,
our results suggest that investments in social capital generate monetary returns (increased income) and psychic returns (increased
subjective well-being) even in a highly developed and multicultural country like Luxembourg. When we are adding on the micro
level variables representing the economic domain of social cohesion following Bernard (1999), then we observe that this domain also has an effect on income and on subjective well-being. Therefore, we recommend including
the economic domain in any future analysis using the concept of social cohesion.