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Trusting Only Whom You Know, Knowing Only Whom You Trust: The Joint Impact of Social Capital and Trust on Individuals' Economic Performance and Well-Being in CEE Countries

Katarzyna Growiec and Jakub Growiec

No 2762, EcoMod2011 from EcoMod

Abstract: This paper provides evidence that bridging and bonding social capital as well as social trust may interdependently affect individuals' earnings and subjective well-being. Paper is based on cross-sectional World Values Survey 2000 data on individuals from Central and Eastern European countries (CEECs),It is shown that majority of citizens of these countries fall in a \low trust trap" where deficits of bridging social capital and trust reinforce each other in lowering individuals' incomes and well-being. Apart from gradual modernization and economic growth, also increases in labor market participation are identified as a poten- tial way out of this \trap", because employed people in CEECs tend to have statistically significantly more bridging social capital and more trust. While assessing robustness of our empirical results, we have found a high risk of regressor endogeneity and omitted variables bias, generally overlooked in earlier studies but controlled for in the current contribution.

Keywords: Central and Eastern Europe countries; EU enlargement; Labor market issues (search for similar items in EconPapers)
Date: 2011-07-06
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Citations: View citations in EconPapers (3)

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http://ecomod.net/system/files/SCap_Jul2010_ESR.pdf

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Working Paper: Trusting Only Whom You Know, Knowing Only Whom You Trust: The Joint Impact of Social Capital and Trust on Individuals' Economic Performance and Well-Being in CEE Countries (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ekd:002625:2762

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