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Inherited Trust and Growth

Listed author(s):
  • Yann Algan

    (Département d'économie)

  • Pierre Cahuc

    (Department of Economics)

This paper develops a new method to uncover the causal effect of trust on economic growth by focusing on the inherited component of trust and its time variation. We show that inherited trust of descendants of US immigrants is significantly influenced by the country of origin and the timing of arrival of their forebears. We thus use the inherited trust of descendants of US immigrants as a time-varying measure of inherited trust in their country of origin. This strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the twentieth century by controlling for country fixed effects.

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Paper provided by Sciences Po in its series Sciences Po publications with number info:hdl:2441/432sbils8u9t7qa99cii5psht1.

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Date of creation: Dec 2010
Publication status: Published in American Economic Review, 2010, vol. 100, pp.2060-2092
Handle: RePEc:spo:wpmain:info:hdl:2441/432sbils8u9t7qa99cii5psht1
Contact details of provider: Web page: http://www.sciencespo.fr/

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