Trust and the Welfare State: the Twin Peaks Curve

Yann Algan (1, 2) , Pierre Cahuc (1, 3, 4, 5) , Marc Sangnier

1 ECON - Département d'économie (Sciences Po)
2 CEPREMAP - Centre pour la recherche économique et ses applications
3 X - École polytechnique
4 ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique
5 CREST - Centre de Recherche en Economie et Statistique [Bruz]

We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits and high taxes only when they are surrounded by trustworthy individuals. We provide empirical evidence for these behaviors and this twin peaks relation in the OECD countries.

Mots clés: Welfare State; Trust; Civism; Corruption; Redistribution

Domaines: Economies et finances

Yann Algan, Pierre Cahuc, Marc Sangnier. Trust and the Welfare State: the Twin Peaks Curve. 2014. ⟨hal-03603011⟩