Work

Income inequality and social trust

Year: 2025

Type: article

Abstract: We study how economic inequality affects social trust. We test this relationship both using correlational evidence from a large social survey of British youth as well as novel causal evidence from a series of online experiments. We find causal evidence that higher inequality has a negative impact on social trust. By contrast, a high relative position leads to higher social trust in both samples. In times where inequality is on the rise these findings are cause for concern. • We examine how economic inequality affects social trust using both observational and experimental data. • Correlational evidence from a large UK youth survey shows that individuals in a higher economic position report more trust. • We provide causal evidence from online experiments that higher inequality reduces social trust, while higher relative position increases it. • Our experimental design cleanly separates the effects of inequality exposure from relative economic position. • These findings highlight two distinct channels through which inequality undermines trust, raising concern in increasingly unequal societies.

Source: Economics Letters

DOI: 10.1016/j.econlet.2025.112675

Authors: Andrea Albertazzi, Patrick Lown, Friederike Mengel

Institutions: IMT School for Advanced Studies Lucca, University of Essex, Erasmus University Rotterdam

Language: English

Topic: Experimental Behavioral Economics Studies

Subfield: Safety Research

Field: Social Sciences

Domain: Social Sciences

SDG: Reduced inequalities

Open Access status: hybrid

Estimated APC paid: $3,030