Trust in Public Institutions over the Business Cycle

Betsey Stevenson and Justin Wolfers

No 5570, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We document that trust in public institutions – and particularly trust in banks, business and government – has declined over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear legacy of the Great Recession, and those countries whose unemployment grew the most suffered the biggest loss in confidence in institutions, particularly in trust in government and the financial sector. Finally, analysis of several repeated cross-sections of confidence within U.S. states yields similar qualitative patterns, but much smaller magnitudes in response to state-specific shocks.

Keywords: trust; banks; congress; survey data; confidence; institutions; media; big business; courts (search for similar items in EconPapers)
JEL-codes: D72 E32 E65 K0 O4 P52 Z13 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2011-03
New Economics Papers: this item is included in nep-bec, nep-cba and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (105)

Published - published in: American Economic Review, 2011, 101 (3), 281-287

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Related works:
Journal Article: Trust in Public Institutions over the Business Cycle (2011)
Working Paper: Trust in Public Institutions over the Business Cycle (2011)
Working Paper: Trust in Public Institutions over the Business Cycle (2011)
Working Paper: Trust in Public Institutions over the Business Cycle (2011)
Working Paper: Trust in public institutions over the business cycle (2011)
Working Paper: Trust in Public Institutions over the Business Cycle (2011)
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