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

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 The Ratio Institute in its series Ratio Working Papers with number 106.

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Length: 32 pages
Date of creation: 18 Oct 2006
Date of revision:
Publication status: Published in Journal of Public Economics, 2008, pages 348-365.
Handle: RePEc:hhs:ratioi:0106
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  19. Delhey, Jan & Newton, Kenneth, 2002. "Who trusts? The origins of social trust in seven nations," Discussion Papers, Research Unit: Social Structure and Social Reporting FS III 02-402, Social Science Research Center Berlin (WZB).
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