Inherited Trust and Growth - Comment
AbstractAlgan and Cahuc in "Inherited Trust and Growth" (AER, 2010) argue that "inherited trust" is a key factor in explaining growth rates across countries. They derive a measure of inherited trust by linking respondents' "home countries" in the United States General Social Survey (1972-2004) and the 2000 wave of the World Values Survey. Algan and Cahuc then estimate trust levels for people born before 1910 (inherited trust in 1935) and afterwards (inherited trust in 2000). They show a strong link between economic growth rates and inherited trust. We do not challenge this result, but we do argue that: (1) the 2000 World Values Survey has many anomalous results; (2) the estimates for inherited trust in 1935 are mostly based upon tiny samples for most ethnic heritage groups in the General Social Survey; and (3) Algan and Cahuc’s findings are based upon two-tailed rather than one-tailed tests. We reestimate their model using the more reliable waves of the World Values Survey and find much weaker relationships between inherited trust in 1935 and trust in the home country. We also suggest caution in the overall measure of inherited trust in 1935.
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Bibliographic InfoPaper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 281.
Length: 10 Pages
Date of creation: 24 Apr 2012
Date of revision:
Inherited trust; generalized trust; US immigrants;
Other versions of this item:
- N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913
- N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
- Z12 - Other Special Topics - - Cultural Economics - - - Religion
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-02 (All new papers)
- NEP-CBE-2012-05-02 (Cognitive & Behavioural Economics)
- NEP-EVO-2012-05-02 (Evolutionary Economics)
- NEP-SOC-2012-05-02 (Social Norms & Social Capital)
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