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On changes in general trust in Europe

Author

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  • Javier Olivera

    (UCD Geary Institute, University College Dublin)

Abstract

This paper analyses the determinants of trust in a pool of 33 European countries over the period 2002-2010. We find that income inequality is negatively related with trust when we analyse pooled data of individuals, which is a well established result if one focuses on crosscountry differences. But, this relation vanishes when we estimate a fixed effects model with the data collapsed by country and year. Omitted variables may account for the significant and negative relationship between economic inequality and trust at the cross-sectional level. In contrast, we find a sizeable, negative and significant effect of the share of persons from minority ethnic groups on trust. This result is found in different specifications for the trust index and distribution of trust.

Suggested Citation

  • Javier Olivera, 2013. "On changes in general trust in Europe," Working Papers 201301, Geary Institute, University College Dublin.
  • Handle: RePEc:ucd:wpaper:201301
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    File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201301.pdf
    File Function: First version, 2013
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    References listed on IDEAS

    as
    1. Gustavsson, Magnus & Jordahl, Henrik, 2008. "Inequality and trust in Sweden: Some inequalities are more harmful than others," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 348-365, February.
    2. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    3. Andrew Leigh, 2006. "Trust, Inequality and Ethnic Heterogeneity," The Economic Record, The Economic Society of Australia, vol. 82(258), pages 268-280, September.
    4. Justina A.V. Fischer & Benno Torgler, 2013. "Do Positional Concerns Destroy Social Capital: Evidence From 26 Countries," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1542-1565, April.
    5. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    6. Niclas Berggren & Henrik Jordahl, 2006. "Free to Trust: Economic Freedom and Social Capital," Kyklos, Wiley Blackwell, vol. 59(2), pages 141-169, May.
    7. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
    8. Leigh, Andrew, 2006. "Does equality lead to fraternity?," Economics Letters, Elsevier, vol. 93(1), pages 121-125, October.
    9. Christian Bjørnskov, 2007. "Determinants of generalized trust: A cross-country comparison," Public Choice, Springer, vol. 130(1), pages 1-21, January.
    10. Sander Steijn & Bram Lancee, 2011. "GINI DP 20: Does Income Inequality Negatively Affect General Trust? Examining three potential problems with the inequality-trust hypothesis," GINI Discussion Papers 20, AIAS, Amsterdam Institute for Advanced Labour Studies.
    11. Steven N. Durlauf, 2002. "On the Empirics of Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 459-479, November.
    12. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2004. "Trust and economic growth: a robustness analysis," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 118-134, January.
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    Cited by:

    1. Hobbs, Jill E. & Goddard, Ellen, 2015. "Consumers and trust," Food Policy, Elsevier, vol. 52(C), pages 71-74.

    More about this item

    Keywords

    Trust; Income Inequality; Europe; Social Attitudes;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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