Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81260
Authors: 
Jordahl, Henrik
Year of Publication: 
2007
Series/Report no.: 
IFN Working Paper 715
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.
Subjects: 
Trust
Inequality
Social Capital
Social Ties
Networks
JEL: 
C23
D31
Z13
Document Type: 
Working Paper

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