Trusting only whom you know, knowing only whom you trust: the joint impact of social capital and trust on individuals’ economic performance and happiness in CEE countries

Katarzyna Growiec () and Jakub Growiec
Additional contact information
Katarzyna Growiec: Szkoła Wyższa Psychologii Społecznej

No 94, NBP Working Papers from Narodowy Bank Polski

Abstract: This paper demonstrates that bridging and bonding social capital as well as social trust interdependently affect individuals’ earnings and happiness. Based on crosssectional World Values Survey 2000 data on individuals from eight Central and Eastern European countries (CEECs), we provide evidence that majority of citizens of these countries have likely fallen in a “low trust trap” where deficits of bridging social capital and trust reinforce each other in lowering individuals’ incomes and happiness. Apart from gradual modernization and economic growth, also increases in labor market participation are identified as a potential 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. These issues are carefully addressed in the current contribution.

Keywords: bridging social capital; bonding social capital; social trust; CEE countries; earnings; happiness (search for similar items in EconPapers)
JEL-codes: D10 J20 (search for similar items in EconPapers)
Pages: 36
Date: 2011
New Economics Papers: this item is included in nep-soc and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://static.nbp.pl/publikacje/materialy-i-studia/94_en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:94

Access Statistics for this paper

More papers in NBP Working Papers from Narodowy Bank Polski Contact information at EDIRC.
Bibliographic data for series maintained by Jakub Growiec ().