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Title: Trust, Racial Fragmentation and Income Inequality: New Evidence from the U.S.

Citation Type: Working Paper

Publication Year: 2014

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Abstract: Existing studies of trust formation in U.S. metropolitan areas have found that trust is lower when there is more income inequality and greater racial fragmentation. I add to this literature by examining the role of income inequality between racial groups (racial income inequality). I find that greater racial income inequality reduces trust. Also, racial fragmentation is no longer a significant determinant of trust once racial income inequality is accounted for. This result is consistent with a simple conceptual framework where concurrent differences in race and income are especially detrimental for trust formation. I find empirical support for further implications deriving from this assumption. In particular, I show that racial income inequality has a more detrimental effect in more racially fragmented communities and that trust falls more in minority groups than in the majority group when racial income inequality increases.

Url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2425582

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Authors: Tesei, Andrea

Series Title: CESifo Working Paper Series

Publication Number: 4718

Institution: CESifo

Pages: 39

Publisher Location:

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

Countries: United States