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Inequality and Trust in Sweden: Some Inequalities are More Harmful than Others

  • Gustavsson, Magnus

    ()

    (Uppsala University)

  • Jordahl, Henrik

    ()

    (Research Institute of Industrial Economics (IFN))

We present new evidence on the influence of income inequality on generalized trust. Using individual panel data from Swedish counties together with an instrumental variable strategy, we find that differences in disposable income, and especially differences among people in the bottom half of the income distribution, are associated with lower trust. The relationship between income inequality and trust is particularly strong for people with a strong aversion against income differentials. We also find that the proportion of people born in a foreign country is negatively associated with trust.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 673.

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Length: 32 pages
Date of creation: 14 Nov 2006
Date of revision:
Publication status: Published in Journal of Public Economics, 2008, pages 348-365.
Handle: RePEc:hhs:iuiwop:0673
Contact details of provider: Postal:
Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden

Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
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