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Inequality and Trust in Sweden: Some Inequalities are More Harmful than Others

Magnus Gustavsson () and Henrik Jordahl ()

No 673, Working Paper Series from Research Institute of Industrial Economics

Abstract: 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.

Keywords: Trust; Social capital; Inequality (search for similar items in EconPapers)
JEL-codes: C23 D31 Z13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ltv and nep-soc
Date: 2006-11-14
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Published in Journal of Public Economics, 2008, pages 348-365.

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