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Return on trust is lower for immigrants

Author

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  • Cettolin, Elena
  • Suetens, Sigrid

Abstract

Trustworthiness is key for successful economic and social interactions. We conduct an experiment with a representative sample of the Dutch population to study whether trustworthiness depends on the ethnicity of the interaction partner. Native Dutch trustees play trust games with an anonymous other, who is either another native Dutch or an immigrant from non-Western descent. We find that the trustees reciprocate trust up to 13% less frequently if the trustor is a non-Western immigrant than if he/she is native Dutch. This percentage increases up to 23% for trustees who report disliking ethnic diversity in society in a survey that took place one year before the experiment. Since the decision to reciprocate does not involve behavioral risk, we take our results as evidence of taste-based discrimination. The implication is that the return on trust is lower for immigrants from non-Western descent than for native Dutch.

Suggested Citation

  • Cettolin, Elena & Suetens, Sigrid, 2017. "Return on trust is lower for immigrants," CEPR Discussion Papers 12244, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12244
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    Cited by:

    1. Felfe, Christina & Kocher, Martin & Rainer, Helmut & Saurer, Judith & Siedler, Thomas, 2018. "More Opportunity, More Cooperation? The Behavioral Effects of Birthright Citizenship on Immigrant Youth," Economics Series 340, Institute for Advanced Studies.

    More about this item

    Keywords

    ethnic diversity; representative sample; taste-based discrimination; trust game; trustworthiness;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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