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On changes in general trust in Europe

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  • Javier Olivera

    (UCD Geary Institute, University College Dublin)

Abstract

This paper analyses the determinants of trust in a pool of 33 European countries over the period 2002-2010. We find that income inequality is negatively related with trust when we analyse pooled data of individuals, which is a well established result if one focuses on crosscountry differences. But, this relation vanishes when we estimate a fixed effects model with the data collapsed by country and year. Omitted variables may account for the significant and negative relationship between economic inequality and trust at the cross-sectional level. In contrast, we find a sizeable, negative and significant effect of the share of persons from minority ethnic groups on trust. This result is found in different specifications for the trust index and distribution of trust.

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File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201301.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by Geary Institute, University College Dublin in its series Working Papers with number 201301.

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Length: 31 pages
Date of creation: 28 Jan 2013
Date of revision:
Handle: RePEc:ucd:wpaper:201301

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Related research

Keywords: Trust; Income Inequality; Europe; Social Attitudes;

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References

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  1. Leigh, Andrew, 2006. "Does equality lead to fraternity?," Economics Letters, Elsevier, vol. 93(1), pages 121-125, October.
  2. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2004. "Trust and economic growth: a robustness analysis," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 118-134, January.
  3. Berggren, Niclas & Jordahl, Henrik, 2005. "Free to Trust? Economic Freedom and Social Capital," Working Paper Series 2005:2, Uppsala University, Department of Economics.
  4. Alesina, Alberto F & La Ferrara, Eliana, 2000. "Who Trusts Others?," CEPR Discussion Papers 2646, C.E.P.R. Discussion Papers.
  5. Gustavsson, Magnus & Jordahl, Henrik, 2008. "Inequality and trust in Sweden: Some inequalities are more harmful than others," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 348-365, February.
  6. Christian Bjørnskov, 2007. "Determinants of generalized trust: A cross-country comparison," Public Choice, Springer, vol. 130(1), pages 1-21, January.
  7. Justina A V Fischer & Benno Torgler, 2011. "Do Positional Concerns Destroy Social Capital: Evidence from 26 Countries," School of Economics and Finance Discussion Papers and Working Papers Series 265, School of Economics and Finance, Queensland University of Technology.
  8. Steven N. Durlauf, 2002. "On the Empirics of Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 459-479, November.
  9. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2002. "Trust and Economic Growth," Tinbergen Institute Discussion Papers 02-049/3, Tinbergen Institute.
  10. Sander Steijn & Bram Lancee, 2011. "GINI DP 20: Does Income Inequality Negatively Affect General Trust? Examining three potential problems with the inequality-trust hypothesis," GINI Discussion Papers 20, AIAS, Amsterdam Institute for Advanced Labour Studies.
  11. Andrew Leigh, 2006. "Trust, Inequality, and Ethnic Heterogeneity," CEPR Discussion Papers 511, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  12. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
  13. 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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