SUMMARYThe potential link between social capital and health suggests important pathways by which health may be improved. We examine this relationship using a unique data set from Argentina. This national survey allows us to determine whether the relationships between social capital and health that have been found in the US and Europe also apply to countries in South America (Argentina is the second‐largest country in South America with a population of approximately 40 million). We estimate a causal effect of individual‐level social capital on health using a measure of informal social interactions as our measure of social capital. Using information about access to public transportation as instrumental variables, we find that both men and women with higher levels of social capital report better health. Copyright © 2010 John Wiley & Sons, Ltd.