Trust, Inequality, and Ethnic Heterogeneity

Abstract

Using a large Australian social survey, combined with precise data on neighbourhood characteristics, I explore the factors that affect trust at a local level ('localised trust') and at a national level ('generalised trust'). Trust is positively associated with the respondent's education, and negatively associated with the amount of time spent commuting. At a neighbourhood level, trust is higher in affluent areas, and lower in ethnically and linguistically heterogeneous communities, with the effect being stronger for linguistic heterogeneity than ethnic heterogeneity. Linguistic heterogeneity reduces localised trust for both natives and immigrants, and reduces generalised trust only for immigrants. Instrumental variables specifications show similar results. By contrast with the United States, there is no apparent relationship between trust and inequality across neighbourhoods in Australia.

Ethnic Diversity and Its Impact on Community Social Cohesion and Neighborly Exchange

“…Leigh argues that ethnic diversity has a negative influence on trust due to differing values and beliefs and an underlying fear of what is different or unknown, which in turn results in an inability of people to work together to enact informal social control. Leigh's () study shows that trust is strongly influenced by ethnolinguistic diversity such that a one standard deviation increase in ethnolinguistic heterogeneity decreases localized trust in Australian communities by 5%.…”

The Diversity Discount: When Increasing Ethnic and Racial Diversity Prevents Tax Increases

“…There is considerable evidence that social capital-that is, ''connections among individuals-social networks and the norms of reciprocity and trustworthiness that arise from them'' (Putnam 2000, 19)-is lower in ethnically and racially diverse environments (Alesina and La Ferrara 2000;Leigh 2006;Putnam 2007). The fifth mechanism posits that diverse communities' lower social capital might in turn dampen their collective willingness to make public investments.…”

Natural disasters and social capital formation: The impact of the Great Hanshin‐Awaji earthquake

“…Generalized trust is more important in generating large efficiency gains than particularized trust (Fafchamps ) This is why generalized trust has attracted special attention (e.g., Bjørnskov ; Berggren and Jordahl ; Leigh , ; Gustavsson and Jordahl ).…”