Blessed are the first: The long-term effect of birth order on trust

Abstract

Acknowledging childhood as a crucial period for the formation of social preferences, we investigate whether the order of birth predicts trust in adult life. We find that laterborns trust on average 5% less than their older siblings, independently from personality traits, family ties, risk aversion and parental inputs. Family random- and fixed-effects estimates suggest that the variation in trust is mostly explained by within- rather than between-family characteristics. The effect of birth order is mediated by education outcomes only for women, while it is moderated by mother’s education for the entire sample, thereby leading to relevant policy implications.