Abstract
Abstract This paper studies the respective influences of intergenerational transmission and the environment in shaping individual trust. Focusing on second generation immigrants in Australia and the United States, we exploit the variation in the home country and in the host country to separate the effect of cultural transmission from that of the social and economic conditions on individual trust. Our results indicate that trust in the home country contributes to the trust of second generation immigrants in both of the host countries, and marginally more in the United States. Social and economic conditions in the host country also affect individual trust. JEL classification J15, O15, Z10
Highlights
Theoretical and empirical research in economics has shown that trust has important macroeconomic and microeconomic implications
We examine whether the difference in the levels of trust of immigrants between the United States and Australia can be explained by a large set of social and economic characteristics: crime rate; segregation; perceived racial inequality; income inequality; unemployment rate; GDP growth; density of population; and female labour force participation
We find results which are qualitatively similar to those presented in Table 2: the effect of trust in the home country is higher for the United States and the difference compared with Australia is still large, not statistically significant
Summary
Theoretical and empirical research in economics has shown that trust has important macroeconomic and microeconomic implications. This paper investigates the respective importance of cultural transmission2 and the environment in shaping individual trust of second-generation immigrants in two different countries: Australia and United States.
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