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Parental Divorce and Generalized Trust

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  • Viitanen, Tarja

    ()
    (University of Otago)

Abstract

This paper examines the effect of parental divorce during childhood on generalized trust later on in life using Australian HILDA panel data. The dependent variable is composed of answers to the statement: “Generally speaking, most people can be trusted”. The main explanatory variables include the occurrence of parental divorce for the whole sample and the age at which parents divorced for the sub-sample. The analysis is conducted using random effects ordered probit, correlated random effects ordered probit and instrumental variables ordered probit models. The results indicate that the level of generalized trust is significantly affected by parental divorce for both men and women. This main result is very robust to alternative specifications. Furthermore, there is a marginally significant effect on the expressed level of generalized trust due to age at which parents divorced for women, but not men.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5898.

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Length: 25 pages
Date of creation: Aug 2011
Date of revision:
Publication status: forthcoming in: Australian Journal of Labour Economics, 2014
Handle: RePEc:iza:izadps:dp5898

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Related research

Keywords: random effects ordered probit; HILDA; generalized trust; parental divorce; instrumental variables ordered probit;

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References

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  1. Corak, Miles Heisz, Andrew, 1999. "Death and Divorce: The Long-term Consequences of Parental Loss on Adolescents," Analytical Studies Branch Research Paper Series 1999135e, Statistics Canada, Analytical Studies Branch.
  2. Rowthorn, Robert, 1999. "Marriage and Trust: Some Lessons from Economics," Cambridge Journal of Economics, Oxford University Press, vol. 23(5), pages 661-91, September.
  3. Betsey Stevenson & Justin Wolfers, 2011. "Trust in public institutions over the business cycle," Working Paper Series 2011-11, Federal Reserve Bank of San Francisco.
  4. Guillaume R. Frechette, 2001. "Random-effects ordered probit," Stata Technical Bulletin, StataCorp LP, vol. 10(59).
  5. Libertad Gonzalez & Tarja Viitanen, 2009. "The Long Term Effects of Legalizing Divorce on Children," Working Papers 0901, University of Otago, Department of Economics, revised Jan 2009.
  6. Jonathan Gruber, 2004. "Is Making Divorce Easier Bad for Children? The Long-Run Implications of Unilateral Divorce," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 799-834, October.
  7. Christian Bjørnskov, 2007. "Determinants of generalized trust: A cross-country comparison," Public Choice, Springer, vol. 130(1), pages 1-21, January.
  8. Berggren, Niclas & Jordahl, Henrik, 2005. "Free to Trust? Economic Freedom and Social Capital," Ratio Working Papers 64, The Ratio Institute.
  9. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  10. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-64, May.
  11. Kevin Lang & Jay L. Zagorsky, 2001. "Does Growing up with a Parent Absent Really Hurt?," Journal of Human Resources, University of Wisconsin Press, vol. 36(2), pages 253-273.
  12. Bjornskov, Christian, 2006. "The multiple facets of social capital," European Journal of Political Economy, Elsevier, vol. 22(1), pages 22-40, March.
  13. Alesina, Alberto F & La Ferrara, Eliana, 2000. "Who Trusts Others?," CEPR Discussion Papers 2646, C.E.P.R. Discussion Papers.
  14. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996. "Trust in Large Organizations," NBER Working Papers 5864, National Bureau of Economic Research, Inc.
  15. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
  16. Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
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