What Determines Trust? Human Capital vs. Social Institutions: Evidence from Manila and Moscow

29 Pages Posted: 5 Nov 2012  

John V. Nye

George Mason University - Department of Economics; National Research University Higher School of Economics

Greg V. Androushchak

National Research University Higher School of Economics

Desiree Desierto

University of the Philippines, Diliman - School of Economics

Garett Jones

George Mason University - Department of Economics

Maria Yudkevich

National Research University Higher School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 4, 2012

Abstract

It is now well established that highly developed countries tend to score well on measures of social capital and have higher levels of generalized trust. In turn, the willingness to trust has been shown to be correlated with various social and environmental factors (e.g. institutions, culture) on one hand, and accumulated human capital on the other. To what extent is an individual’s trust driven by contemporaneous institutions and environmental conditions and to what extent is it determined by the individual’s human capital? We collect data from students in Moscow and Manila and use the variation in their height and gender to instrument for measures of their human capital to identify the causal effect of the latter on trust. We find that human capital positively affects the propensity to trust, and its contribution appears larger than the combined effect of other omitted variables including, plausibly, social and environmental factors.

Suggested Citation

Nye, John V. and Androushchak, Greg V. and Desierto, Desiree and Jones, Garett and Yudkevich, Maria, What Determines Trust? Human Capital vs. Social Institutions: Evidence from Manila and Moscow (November 4, 2012). GMU Working Paper in Economics No. 12-54. Available at SSRN: https://ssrn.com/abstract=2171088 or http://dx.doi.org/10.2139/ssrn.2171088

John V. C. Nye (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-4272 (Phone)

National Research University Higher School of Economics

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Greg V. Androushchak

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Desiree Desierto

University of the Philippines, Diliman - School of Economics ( email )

Encarnacion Hall
F. M. Guerrero corner S. Osmena Sts
U.P. Diliman, Quezon City
Philippines

Garett Jones

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

Maria Yudkevich

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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