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Trust and the Welfare State: the Twin Peaks Curve

Author

Listed:
  • Yann Algan

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

  • Pierre Cahuc

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

  • Marc Sangnier

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

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.

Suggested Citation

  • Yann Algan & Pierre Cahuc & Marc Sangnier, 2016. "Trust and the Welfare State: the Twin Peaks Curve," Post-Print hal-01447855, HAL.
    • Handle: RePEc:hal:journl:hal-01447855
    DOI: 10.1111/ecoj.12278
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    References listed on IDEAS

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    More about this item

    Keywords

    Economie quantitative;

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • Z1 - Other Special Topics - - Cultural Economics

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