Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities

37 Pages Posted: 25 Apr 2011

See all articles by Alberto Chong

Alberto Chong

University of Ottawa

Hugo Ñopo

Inter-American Development Bank (IDB); IZA Institute of Labor Economics

Vanessa Ríos

affiliation not provided to SSRN

Date Written: January 2009

Abstract

This paper argues that welfare programs are linked with the destruction of social capital, as measured by interpersonal trust in laboratory games. The paper employs experimental data for representative samples of individuals in four Latin American capital cities (Bogota, Lima, Montevideo, and San Jose), finding that participation in welfare programs damage trust. This result is robust to the inclusion of individual risk measures and a broad array of controls. The findings also support the notion that low take-up rates may be due to stigma linked with trust and social capital, rather than transaction costs.

Suggested Citation

Chong, Alberto and Nopo, Hugo and Ríos, Vanessa, Do Welfare Programs Damage Interpersonal Trust? Experimental Evidence from Representative Samples for Four Latin American Cities (January 2009). IDB Working Paper No. 559. Available at SSRN: https://ssrn.com/abstract=1821910 or http://dx.doi.org/10.2139/ssrn.1821910

Alberto Chong (Contact Author)

University of Ottawa ( email )

2292 Edwin Crescent
Ottawa, Ontario K2C 1H7
Canada

Hugo Nopo

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Vanessa Ríos

affiliation not provided to SSRN

No Address Available

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