Welfare States and Social Trust

Abstract

This article tests the linkage between institutional configuration and social trust, highlighting the role of the welfare states in coordinating interests among different labor market actors. This study initially builds a theoretical framework distinguishing training-supplemented welfare regimes from transfer-based welfare regimes. Evidence from descriptive and multivariate analyses of World Values Survey based on 17 advanced industrial democracies supports my argument that public investment in skill provision prevalent in training-supplemented welfare states leads to higher accumulation of social trust, whereas passive social transfers result in lower social trust. Especially, high investment in public skill provision leads to a decreased gap in social trust between employers and low-skilled workers, as well as among different occupational groups. In addition, the negative effect of passive social transfers on trust is greatly ameliorated when it is jointly configured with high active labor market policies. The findings lend credibility to my claim that specific social policies aiming to upgrade citizens’ skill levels provide employees with better prospects for managing life chances (and risks) and therefore building higher social trust.