Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283708 
Year of Publication: 
2023
Series/Report no.: 
WIDER Working Paper No. 2023/12
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
This paper investigates the importance of accounting for the profile of inequality in the analysis of institutional trust. Drawing on individual data from 82 countries around the world over the 1981-2021 period, it sheds light on the potential limitations of exploring the impact of the income distribution's shape on trust, using-as is traditional in the literature-a single inequality indicator. Results suggest that total income inequality and institutional trust are positively associated but this aggregated result hides some troubling countervailing effects. In fact, when the whole profile of inequality is considered, institutional trust appears to be significantly and negatively related to inequality between different income groups in society-namely, between the poor, the middle class, and the rich-whereas it is positively associated with inequality within those income groups. Although some heterogeneities in these findings can be detected according to the country's level of development as well as according to personal characteristics related to political views, the profile of inequality does always matter. Thus, this paper indicates that limiting the analysis to one single inequality aggregator would only capture an average effect and hide a more complex underlying nexus between income distribution and institutional trust.
Subjects: 
institutional trust
inequality
between-group inequality
within-group inequality
political preferences
JEL: 
D31
O15
Z13
Persistent Identifier of the first edition: 
ISBN: 
978-92-9267-320-8
Document Type: 
Working Paper

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