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Inequality and Trust: Some Inequalities are More Harmful than Others

  • Gustavsson, Magnus

    ()

    (Department of Economics)

  • Jordahl, Henrik

    (Department of Economics)

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 Uppsala University, Department of Economics in its series Working Paper Series with number 2006:3.

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Length: 29 pages
Date of creation: 17 Jan 2006
Date of revision:
Publication status: Published in Journal of Public Economics, 2008, pages 348-365.
Handle: RePEc:hhs:uunewp:2006_003
Contact details of provider: Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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