Abstract
Trust plays a vital role in shaping numerous socio-economic behaviors. However, little is known about how significant life events, such as adverse and beneficial health events, shape up trust. Therefore, we examine the impact of positive and negative health events on general trust using the LISS panel (3911 respondents) from the Netherlands. The primary health event variable is constructed by comparing self-reported health in 2017 with 2018, while trust measured in 2019 (after the health survey) is used as the outcome variable. We find a significant and negative impact of adverse health events on trust, while positive health events have an insignificant effect. We perform several robustness checks that support our main findings. Further investigation shows that negative health events impact trust by reducing psychological wellbeing and social interactions. The results provide fresh insights into the health events and trust nexus.
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