This paper investigates the impact of instrumented aggregate social capital on welfare (proxy with per capita household expenditure) among rural households in Indonesia. The research has found three instrumental variable, including participation of household in religious activity, participation of household in sport activity, and the number of social organizations in rural areas to solve the endogeneity problem. Using a model two stage least squares (2SLS), the study focus on the issue whether ownership of the aggregate social capital help household to increase per capita expenditure. The result indicates that aggregate social capital affects the welfare status positively and significantly. Further, the results show that the estimate of the instrumented aggregate social capital from the 2SLS model is higher than OLS model. To enhance social capital and increase welfare, we suggest government agencies should facilitate the participation of households in community activities and increase the number and activities of social organizations in rural areas.