Working Paper No. 673

Inequality and Trust in Sweden: Some Inequalities are More Harmful than Others

Published: November 14, 2006Pages: 32Keywords: Trust; Social capital; InequalityJEL-codes: C23; D31; Z13

Inequality and Trust in Sweden: Some Inequalities are More Harmful than Others Magnus Gustavsson and Henrik Jordahl


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.

 

Henrik Jordahl

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Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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