The frequently studied concept of social capital has often been related to health, but theconceptualisationand measurement of the conceptisanon-goingdebate. The main aim of this thesis is to study the relationship of four different indicators of social capital; informal social capital, formal social capital, trust towards institutions and trust towards others, with self-rated physical health and self-rated mental health in Iceland in 2009, shortly after a harsh economic crash. Insomnia symptoms will be studied as a possible mediator or moderator in the relationship. Furthermore, longitudinal data on informal social capital will be used to see the causal effect of social capital on health and to see if informal social capital decreased after the economic collapse. Population-based panel data from Iceland in 2007 and 2009 will be used to perform both cross-sectional analysis (n = 3,243) and longitudinal analysis (n = 3,131). The main results are that the four indicators of social capital all relate differently to physical and mental self-rated health, and insomnia symptoms seem to mediate the relationship between social capital and health, especially physical health. Surprisingly, informal social capital did increase during the economic collapse. The panel analysis further suggests that having poor informal social capital has causal effects on poor self-rated mental health when adjusted for symptoms of insomnia, age, gender, family status, education and smoking.