Who are Your Joneses? Socio-Specific Income Inequality and Trust

Area of Science:

• Socioeconomics
• Social Psychology

Background:

• Trust is fundamental to economic and societal functioning, underpinning commercial transactions and development.
• Existing research often adopts a macro-level view of the inequality-trust link, overlooking within-country variations.
• Perceptions of economic disparity and socioeconomic reference points are key determinants of trust.

Purpose of the Study:

• To investigate the interplay between income inequality and generalized trust at a more granular, within-country level.
• To identify how age-specific income disparities influence social trust.
• To analyze trust and inequality patterns across different European countries.

Main Methods:

• Utilizing data from the European Social Survey (ESS) 5 for generalized trust measurements.
• Employing 2009 EU-SILC data to calculate income inequality for specific age cohorts across 22 countries.
• Analyzing variations in inequality measures within and between countries.

Main Results:

• Significant variations in income inequality were observed across age groups and countries.
• Even in countries with low overall inequality, such as Sweden, income imbalances within age groups were detected.
• These within-group income disparities demonstrated a potential to undermine social trust.

Conclusions:

• Within-country income inequality, particularly among specific age groups, significantly impacts social trust.
• A refined, micro-level analysis is crucial for understanding the complex relationship between inequality and trust.
• Policy interventions addressing age-specific income disparities may be necessary to foster social cohesion.