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Inequality and Trust in Sweden: Some Inequalities are More Harmful than Others

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Author Info
Gustavsson, Magnus () (Uppsala University)
Jordahl, Henrik () (Research Institute of Industrial Economics (IFN))

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Abstract

We present new evidence on the influence of income inequality on generalized trust. Using individual panel data from Swedish counties together with an instrumental variable strategy, we find that differences in disposable income, and especially differences among people in the bottom half of the income distribution, are associated with lower trust. The relationship between income inequality and trust is particularly strong for people with a strong aversion against income differentials. We also find that the proportion of people born in a foreign country is negatively associated with trust.

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Publisher Info
Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 673.

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Length: 32 pages
Date of creation: 14 Nov 2006
Date of revision:
Publication status: Published in Journal of Public Economics, 2008, pages 348-365.
Handle: RePEc:hhs:iuiwop:0673

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Related research
Keywords: Trust; Social capital; Inequality;

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Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  3. Mikael Carlsson & Stefan Eriksson & Nils Gottfries, 2006. "Testing Theories of Job Creation: Does Supply Create Its Own Demand?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  4. Alberto Alesina & Eliana La Ferrara, 2000. "Participation In Heterogeneous Communities," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 847-904, August. [Downloadable!] (restricted)
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  5. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07. [Downloadable!] (restricted)
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  6. Philippe Aghion & Eve Caroli & Cecilia Garcia-Penalosa, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December. [Downloadable!] (restricted)
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  7. Thijs Knaap, 2005. "Trade, Location, and Wages in the United States," Working Papers 05-30, Utrecht School of Economics. [Downloadable!]
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  9. 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.
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  11. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Blackwell Publishing, vol. 47(1), pages 225-38, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Berggren, Niclas & Bjørnskov, Christian, 2009. "Does Religiosity Promote or Discourage Social Trust? Evidence from Cross-Country and Cross-State Comparisons," Ratio Working Papers 142, The Ratio Institute. [Downloadable!]
  2. Jordahl, Henrik, 2007. "Inequality and Trust," Working Paper Series 715, Research Institute of Industrial Economics. [Downloadable!]
  3. Jeremy Clark & Bonggeun Kim, 2009. "The effect of social diversity on volunteering: Evidence from New Zealand," Working Papers in Economics 09/09, University of Canterbury, Department of Economics. [Downloadable!]
  4. Yamamura, Eiji, 2008. "Comparison of neighborhood trust between generations in a racially homogeneous society: A case study from Japan," MPRA Paper 10218, University Library of Munich, Germany. [Downloadable!]
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This page was last updated on 2009-11-25.


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