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Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities

Author

Listed:
  • Alberto Chong

  • Hugo Nopo

  • Vanessa Rios

Abstract

This paper argues that welfare programs are linked with the destruction of social capital, as measured by interpersonal trust in laboratory games. The paper employs experimental data for representative samples of individuals in four Latin American capital cities (Bogota, Lima, Montevideo, and San Jose), finding that participation in welfare programs damage trust. This result is robust to the inclusion of individual risk measures and a broad array of controls. The findings also support the notion that low take-up rates may be due to stigma linked with trust and social capital, rather than transaction costs.

Suggested Citation

  • Alberto Chong & Hugo Nopo & Vanessa Rios, 2009. "Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities," Research Department Publications 4609, Inter-American Development Bank, Research Department.
    • Handle: RePEc:idb:wpaper:4609
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    References listed on IDEAS

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    1. Janet Currie, 2004. "The Take Up of Social Benefits," NBER Working Papers 10488, National Bureau of Economic Research, Inc.
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    6. Rebecca M. Blank & Patricia Ruggles, 1993. "When Do Women Use AFDC & Food Stamps? The Dynamics of Eligibility vs. Participation," NBER Working Papers 4429, National Bureau of Economic Research, Inc.
    7. Arik Levinson and Sjamsu Rahardja, 2004. "Medicaid Stigma," Working Papers gueconwpa~04-04-06, Georgetown University, Department of Economics.
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    9. Cárdenas, Juan Camilo & Chong, Alberto E. & Ñopo, Hugo R., 2008. "To What Extent do Latin Americans Trust and Cooperate?: Field Experiments on Social Exclusion In Six Latin American Countries," IDB Publications (Working Papers) 1616, Inter-American Development Bank.
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    Cited by:

    1. Martin Leites & Gustavo Pereira & Andres Rius & Gonzalo Salas & Andrea Vigorito, 2017. "PROTOCOL: The effect of cash transfers on social solidarity: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 13(1), pages 1-49.

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    Keywords

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    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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