Trust and the Welfare State: The Twin Peaks Curve
37 Pages Posted: 25 Sep 2014
Date Written: July 2014
Abstract
We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits and high taxes only when they are surrounded by trustworthy individuals. We provide empirical evidence for these behaviors and this twin peaks relation in the OECD countries.
Keywords: trust, welfare states
JEL Classification: H1
Suggested Citation: Suggested Citation
Algan, Yann and Cahuc, Pierre and Sangnier, Marc, Trust and the Welfare State: The Twin Peaks Curve (July 2014). CEPR Discussion Paper No. DP10061, Available at SSRN: https://ssrn.com/abstract=2501534
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