Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/81233 
Year of Publication: 
2006
Series/Report no.: 
IFN Working Paper No. 673
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
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.
Subjects: 
Trust
Social capital
Inequality
JEL: 
C23
D31
Z13
Document Type: 
Working Paper

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