Trusting only whom you know, knowing only whom you trust: the joint impact of social capital and trust on individuals’ economic performance and happiness in CEE countries
AbstractThis paper demonstrates that bridging and bonding social capital as well as social trust interdependently affect individuals’ earnings and happiness. Based on crosssectional World Values Survey 2000 data on individuals from eight Central and Eastern European countries (CEECs), we provide evidence that majority of citizens of these countries have likely fallen in a “low trust trap” where deficits of bridging social capital and trust reinforce each other in lowering individuals’ incomes and happiness. Apart from gradual modernization and economic growth, also increases in labor market participation are identified as a potential way out of this “trap”, because employed people in CEECs tend to have statistically significantly more bridging social capital and more trust. While assessing robustness of our empirical results, we have found a high risk of regressor endogeneity and omitted variables bias, generally overlooked in earlier studies. These issues are carefully addressed in the current contribution.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bank of Poland, Economic Institute in its series National Bank of Poland Working Papers with number 94.
Date of creation: 2011
Date of revision:
Contact details of provider:
Postal: 00-919 Warszawa ul. Świętokrzyska 11/21
Phone: (0-22) 653 10 00
Fax: (0-22) 620 85 18
Web page: http://www.nbp.pl/Homen.aspx?f=en/publikacje/materialy_i_studia/informacja_en.html
More information through EDIRC
bridging social capital; bonding social capital; social trust; CEE countries; earnings; happiness;
Find related papers by JEL classification:
- D10 - Microeconomics - - Household Behavior - - - General
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-01 (All new papers)
- NEP-SOC-2011-10-01 (Social Norms & Social Capital)
- NEP-TRA-2011-10-01 (Transition Economics)
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.:
- Sjoerd Beugelsdijk & Sjak Smulders, 2003. "Bridging and Bonding Social Capital: which type is good for economic growth?," ERSA conference papers ersa03p517, European Regional Science Association.
- James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003.
"Fifty Years of Mincer Earnings Regressions,"
NBER Working Papers
9732, National Bureau of Economic Research, Inc.
- Growiec, Katarzyna & Growiec, Jakub, 2009. "Social Capital, Trust, and Multiple Equilibria in Economic Performance," MPRA Paper 19518, University Library of Munich, Germany.
- Growiec, Jakub & Growiec, Katarzyna, 2007. "Social Capital, Well-Being, and Earnings: Theory and Evidence from Poland," MPRA Paper 7071, University Library of Munich, Germany.
- Roxana Mihet, 2012.
"Effects of Culture on Firm Risk-Taking,"
IMF Working Papers
12/210, International Monetary Fund.
- Roxana Mihet, 2013. "Effects of culture on firm risk-taking: a cross-country and cross-industry analysis," Journal of Cultural Economics, Springer, vol. 37(1), pages 109-151, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ewa Szymecka).
If references are entirely missing, you can add them using this form.