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Trust and the Welfare State: the Twin Peaks Curve

Author

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  • Yann Algan

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres)

  • Pierre Cahuc

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique, ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique, CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz])

  • Marc Sangnier

Abstract

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.

Suggested Citation

  • Yann Algan & Pierre Cahuc & Marc Sangnier, 2014. "Trust and the Welfare State: the Twin Peaks Curve," Working Papers hal-03603011, HAL.
    • Handle: RePEc:hal:wpaper:hal-03603011
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03603011
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    References listed on IDEAS

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    More about this item

    Keywords

    Welfare State; Trust; Civism; Corruption; Redistribution;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • Z1 - Other Special Topics - - Cultural Economics

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