This document discusses the relationship between trust, welfare states, and income equality. It presents four main conclusions:
1. Trust helps countries build and maintain larger welfare states.
2. Welfare states increase income equality.
3. Trust also increases income equality even when controlling for the size of the welfare state.
4. Welfare states do not directly increase levels of trust within a society.
3. Trust Income equality
Welfare state
Trust -> Welfare state size:
Bergh & Bjørnskov (2011) using instruments (temperature, constitutional
monarchy, grammar)
Trust -> Welfare state size:
Bjørnskov & Svendsen (2012) using US 3rd generation immigrants
Welfare state universality -> trust (Kumlin & Rothstein, individual level data)
4. Historical Trust Levels Predict the
Current Size
of the Welfare State
Excludes outliers
ten-year averages of
government ideology,
taken from the Database
of PoliticalInstitutions
KYKLOS, 2011:1, p.
1–19.
5. • Trust -> welfare state -> equality
• ... equality -> trust (positive feed back dynamic)
• or
• trust -> equality
• ?
6. Does trust cause equality?
Inequality in 2 is higher than in 1.
But inequality is lowest in 3.
7. A structural equations model
Monarchy
Intensity of
religiosity
Kuznets curves
Rel. composition
Legal origin
IQ
Trust Inequality
Postcommunist
Nordic country
Regions
GDP per capita and its squared
term, the degree of democracy and
its squared term), dummies
capturing variations in religious
affiliation, and a control for common
law countries, IQ scores to capture
inequality arising from skills-based
technological progress.
11. Four conclusions
• Trust aid countries in building and maintaining welfare
states (Nannestad 2008, Rothstein 2001)
• Welfare states increase equality
• Trust increases equality - also when controlling
for welfare state size!
• Welfare states do not increase trust
