The Inequality-Trust Nexus Revisited: At What Level of Aggregation Does Income Inequality Matter for Social Trust?

Abstract

The negative linkage between income inequality and social trust is widely acknowledged. Despite this consensus, it remains unclear at what level of aggregation income inequality matters most to the cultivation of social trust. In a comprehensive review, Wilkinson and Pickett (Annu Rev Sociol 35:493–511, 2009) speculate that income inequality is most important when measured at the societal level, whereas for lower units of aggregation economic development becomes a stronger predictor. Merging regional inequality data for 216 regions in 22 European countries (2010–2014) to the European Social Survey, this paper is the first to examine this claim for social trust. The results demonstrate that in non-Eastern European countries most of the variation in social trust is accounted for by differences in inequality between countries rather than differences in inequality within countries. For economic development, the opposite is true. Within-country differences in economic development relate significantly to social trust, while between-country differences do not. I conclude that social trust is more strongly affected by the stratification of society as a whole than by income inequalities within smaller units of aggregation.