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Does Equality Lead to Fraternity?

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  • Andrew Leigh

    ()
    (SPEAR Centre, RSSS, ANU)

Abstract

Several cross-country studies have observed a negative correlation between inequality and interpersonal trust. Using data from 59 countries, I instrument for inequality using the relative size of the mature-aged cohort, and find that a rise in inequality reduces trust.

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Bibliographic Info

Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 513.

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Length: 13 pages
Date of creation: Jan 2006
Date of revision:
Handle: RePEc:auu:dpaper:513

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Keywords: Trust; inequality; ethnic fractionalization; instrumental variables;

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References

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  1. Marcel Fafchamps & Steven N. Durlauf, 2004. "Social Capital," Economics Series Working Papers WPS/2004-14, University of Oxford, Department of Economics.
    • Durlauf, Steven N. & Fafchamps, Marcel, 2005. "Social Capital," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 26, pages 1639-1699 Elsevier.
  2. Orana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Cooperation in collective action," Natural Field Experiments 00211, The Field Experiments Website.
  3. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
  4. Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2003. "Fractionalization," NBER Working Papers 9411, National Bureau of Economic Research, Inc.
  5. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
  6. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 811-846, August.
    • Scheinkman, Jose A. & Soutter, Christine L. & Glaeser, Edward Ludwig & Laibson, David I., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
  7. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
  8. Marcel Fafchamps, 2004. "Social Capital and Development," Economics Series Working Papers 214, University of Oxford, Department of Economics.
  9. Andrew Leigh, 2006. "Trust, Inequality, and Ethnic Heterogeneity," CEPR Discussion Papers 511, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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Citations

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Cited by:
  1. Giacomo Corneo, 2011. "GINI DP 17: Income Inequality, Value Systems and Macroeconomic Performance," GINI Discussion Papers 17, AIAS, Amsterdam Institute for Advanced Labour Studies.
  2. Jordahl, Henrik, 2007. "Inequality and Trust," Working Paper Series 715, Research Institute of Industrial Economics.
  3. Dierk Herzer & Peter Nunnenkamp, 2011. "Income Inequality and Health: New Evidence from Panel Data," Kiel Working Papers 1736, Kiel Institute for the World Economy.
  4. Hilde Coffé, 2009. "Social Capital and Community Heterogeneity," Social Indicators Research, Springer, vol. 91(2), pages 155-170, April.
  5. Eiji Yamamura, 2008. "Determinants of trust in a racially homogeneous society," Economics Bulletin, AccessEcon, vol. 26(1), pages 1-9.
  6. Yamamura, Eiji, 2013. "Natural disasters and social capital formation: The impact of the Great Hanshin-Awaji earthquake," MPRA Paper 44493, University Library of Munich, Germany.
  7. repec:aia:ginidp:dp17 is not listed on IDEAS
  8. Yamamura, Eiji, 2011. "The role of social trust in reducing long-term truancy and forming human capital in Japan," Economics of Education Review, Elsevier, vol. 30(2), pages 380-389, April.
  9. Yamamura, Eiji, 2008. "The role of social capital in homogeneous society: Review of recent researches in Japan," MPRA Paper 11385, University Library of Munich, Germany.
  10. Yamamura, Eiji & Antonio R, Andrés, 2011. "Trust and Fertility: Evidence from OECD countries," MPRA Paper 29978, University Library of Munich, Germany.
  11. Javier Olivera, 2013. "On changes in general trust in Europe," Working Papers 201301, Geary Institute, University College Dublin.
  12. repec:ebl:ecbull:v:26:y:2008:i:1:p:1-9 is not listed on IDEAS
  13. Olivera, J., 2013. "GINI DP 80: On changes in general trust in Europe," GINI Discussion Papers 80, AIAS, Amsterdam Institute for Advanced Labour Studies.
  14. Yamamura, Eiji, 2008. "The effects of inequality, fragmentation, and social capital on collective action in a homogeneous society: Analyzing responses to the 2005 Japan Census," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(5), pages 2054-2058, October.

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