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Trust and the Welfare State: the Twin Peaks Curve

Listed author(s):
  • Yann Algan

    (ECON - Département d'économie - Sciences Po)

  • Pierre Cahuc

    (Department of Economics, Ecole Polytechnique - Polytechnique - X - CNRS - Centre National de la Recherche Scientifique)

  • Marc Sangnier

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille 2 - Université Paul Cézanne - Aix-Marseille 3 - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits and high taxes only when they are surrounded by trustworthy individuals. We provide empirical evidence for these behaviors and this twin peaks relation in the OECD countries.

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Paper provided by HAL in its series Post-Print with number hal-01447855.

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Date of creation: Jun 2016
Publication status: Published in Economic Journal, 2016, 126 (593), pp.861--883. <10.1111/ecoj.12278>
Handle: RePEc:hal:journl:hal-01447855
DOI: 10.1111/ecoj.12278
Note: View the original document on HAL open archive server: https://hal-amu.archives-ouvertes.fr/hal-01447855
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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