Inequality and Trust

Henrik Jordahl

No 715, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper reviews the literature on economic inequality and trust. Cross-country studies, within-country studies, and experiments all suggest that economic inequality exerts a negative influence on trust. Four mechanisms are proposed to explain the negative relationship: social ties (or networks), inference on social relationships (to see inequality as a signal of untrustworthy behavior), conflicts over resources, and opportunity cost of time. Social ties receive the strongest empirical support, but there is also some evidence in favor of inference on social relationships. Conflicts over resources and opportunity cost of time are contradicted by important pieces of evidence.

Keywords: Trust; Inequality; Social Capital; Social Ties; Networks (search for similar items in EconPapers)
JEL-codes: C23 D31 Z13 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2007-08-21
New Economics Papers: this item is included in nep-exp, nep-net and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Published in Handbook of Social Capital, Svendsen, Gert, Svendsen, Gunnar (eds.), 2009, chapter 19, Edward Elgar.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0715

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