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...

We conduct an extensive robustness analysis of the relationship between trust and growth for a later time period (the 1990s) and with a bigger sample (63 countries) than previous studies. In addition to robustness tests that focus on model uncertainty, we use Least Trimmed Squares, a robust...

We present new evidence on how generalized trust is formed. Unlike previous studies, we look at the explanatory power of economic institutions, we use newer data, we incorporate more countries, and we use instrumental variables to handle the causality problem. A central result is that legal...

We examine the effect of generalized trust on long-term economic growth. Unlike in previous studies, we use Bayesian model averaging to deal rigorously with model uncertainty and attendant omitted variable bias. In addition, we address endogeneity and assess whether the effect of trust on growth...

Transaction costs are a major reason why international trade flows are much smaller than traditional trade theory would suggest. Trust between trading partners lowers transaction costs and may therefore enhance trade. The empirical analysis of this paper shows that more trust leads to more trade...

Co-ethnic employment refers to the stylised fact of many labour markets that there is an over-representation of workers of the same ethnic group within firms. This paper presents empirical proof of the phenomenon and analyses the incentives for employees to work in co-ethnic firms. It argues...

This paper examines the effect of exposure to a culture of easier divorce as a minor on generalized trust using the General Social Survey from 1973-2010. The easier divorce culture is defined as the introduction of no-fault including unilateral divorce reforms across the US. According to the...

This paper finds evidence that more democratic political institutions increase trust. Second generation immigrants with ancestries from 115 countries are studied within 30 European countries. Comparing individuals born and residing in the same country, those whose father was born in a more...

Can a major shock in childhood permanently shape trust? We consider a hunger episode in Germany after WWII and construct a measure of hunger exposure from official data on caloric rations set monthly by the occupying forces providing regional and temporal variation. We correlate hunger exposure...