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Trust, welfare states and income equality: Sorting out the causality

Författare

Summary, in English

The cross-country correlation between social trust and income equality is well documented, but few studies examine the direction of causality. We show theoretically that by facilitating cooperation, trust may lead to more equal outcomes, while the feedback from inequality to trust is ambiguous. Using a structural equation model estimated on a large country sample, we find that trust has a positive effect on both market and net income equality. Larger welfare states lead to higher net equality but neither net income equality nor welfare state size seems to have a causal effect on trust. We conclude that while trust facilitates welfare state policies that may reduce net inequality, this decrease in inequality does not increase trust. (C) 2014 Elsevier B.V. All rights reserved.

Publiceringsår

2014

Språk

Engelska

Sidor

183-199

Publikation/Tidskrift/Serie

European Journal of Political Economy

Volym

35

Dokumenttyp

Artikel i tidskrift

Förlag

Tranfer Verlag, Regensburg, FRG

Ämne

  • Economics

Nyckelord

  • Social trust
  • Inequality
  • Welfare state

Status

Published

ISBN/ISSN/Övrigt

  • ISSN: 0176-2680