1. Is Generalized Trust Decreasing Because of Rising Income Inequality in the U.S.? Introduction John B. Nezlek & Chris C. Martin The primary analyses were multilevel models for binary outcomes (multilevel logistical regression), in which respondents (level 1) were nested within surveys (years, level 2). These analyses were done using HLM-7, which produces two estimates for binary outcomes, unit-specific and population- average. Because our emphasis is on the overall relationship between Gini and trust, we present the population average. The model is below 1 : Level 1: Prob(y = 1|  0j ) =  Level 2:  0j =  00 +  01 (Gini-Z) + u 0j The analyses estimated that across all the years of the survey was conducted, 35% (  00 = -0.62) of people said they trusted other people. As expected, this percent covaried significantly with the Gini coefficient across years (  01 = ‑ 27, t = 2.19, p <.05). As the Gini went up (as income inequality increased), trust went down. A Gini +1 SD increase is associated with a trust level of 29%, while a –1 SD decrease is associated with a trust level of 41%. Longitudinal trust data were obtained from the General Social Survey (GSS; National Opinion Research Center, 2010). We were able to transform responses to the same metric, a dichotomous response to “In general, do you think that most people can be trusted, or can’t you be too careful in dealing with people?” This measure has been found to have predictive ecological validity (e.g. Knack, 2001). For income inequality, the Gini coefficient was used as a measure (U.S. Census Bureau, 2009). The Gini coefficient is named after statistician and sociologist Corrado Gini (1884-1965). A coefficient of zero indicates an equal distribution, whereas a coefficient of one indicates one person earns all the income. The simple correlation (r) between year and Gini coefficient for the period 1972-2008 is.97. 1. In this model, a coefficient, , is estimated for each year (level 2 unit). This coefficient is sometimes referred to as a logit. For a Bernoulli model such as this, the null hypothesis is that 50% of people trust others, i.e., that  = 0. Logits can be described in terms of odds-ratios or converted to probabilities. We present probabilities because social and personality psychologists are probably more familiar with them than they are with odds-ratios. The Occupy Wall Street movement may have brought income inequality to the fore in 2011, but rising income inequality in the U.S. has concerned social scientists for decades. Income inequality has been rising in the U.S., with current levels of inequality reaching pre-Great-Depression levels. As measured by the ratio of the top 0.01% to the bottom 99.99%, 2007 was the most unequal year for Americans since at least 1913 (Saez, 2010). Income inequality affects the health and psychological well-being of citizens. It predicts negative outcomes, including more depressive episodes (Cifuentes et al., 2008), poor general health among U.S. whites (Zimmerman & Bell, 2005), and high suicide rates (Gunnell, Middleton, Whitley, Dorling, & Frankel, 2003). We contend that income inequality also reduces generalized trust, which is trust in all citizens including those different from oneself. Such trust is a form of social capital, and it predicts support for the democratic process and participation in democratic and community institutions. Trusting people are more likely to care about their community and engage with people outside their immediate networks (see Jamal & Nooruddin, 2010; Nannestad, 2008 for reviews). The literature already contains studies of the relationship between higher income inequality and lower generalized trust in others. In a cross-sectional study of 76 countries, Bjørnskov (2006) found income inequality was the strongest predictor of trust—a one SD decrease in income equality predicted a.375 SD increase in trust (see also Knack & Keefer, 1997; Knack & Zak, 2002; Uslaner, 2002; Zak & Knack, 2001). However, such evidence is cross-sectional, not longitudinal.. Although our evidence is correlational, it does not seem plausible that lowered trust causes greater income inequality, nor that a proximal cause of income inequality, such as tax legislation, also causes decreased trust. Thus, the causal direction is likely from income inequality to trust. A recent study (Oishi, Kesebir, & Diener, 2011), which uses the same data as ours, supports our finding, revealing that trust mediates the negative relationship between income inequality and well- being. It is likely that income inequality spurs invidious upward comparisons by those with lower incomes (e.g. Zimmerman & Bell, 2005), causing them to experience resentment and cynicism. Income inequality probably also spurs hopelessness about advancement opportunities and socioeconomic progress. If income inequality in the U.S. continues to increase, we may see trust fall below the threshold necessary for civic stability. Bjørnskov, C. (2006). Determinants of generalized trust: A cross-country comparison. Public Choice, 130, 1-21. Cifuentes, M., Sembajwe, G., Tak, S., Gore, R., Kriebel, D., & Punnett, L. (2008) The association of major depressive episodes with income inequality and the human development index. Social Science and Medicine, 67, 529-539. Gunnell, D., Middleton, N., Whitley, E., Dorling, D., & Frankel. S. (2003). Why are suicide rates rising in young men but falling in the elderly?—A time-series analysis of trends in England and Wales 1950–1998. Jamal, A., & Nooruddin, I. (2010). The democratic utility of trust. The Journal of Politics, 72, 45–59. Knack, S. (2001). Trust, associational life and economic performance. In J.F. Helliwell (Ed.), The contribution of human and social capital to sustained economic growth and well-being. Quebec: Human Resources Development Canada. Knack, S., & Keefer, P. (1997). Does social capital have an economic pay-off? A cross-country investigation. Quarterly Journal of Economics, 112, 1251-1288. Knack, S., & Zak, P. J. (2002). Building trust: public policy, interpersonal trust, and economic development. Supreme Court Economic Review, 10, 91-107. National Opinion Research Center. (2010). Download data. Retrieved from http://www.norc.uchicago.edu/GSS+Website/ Download/ Oishi, S., Kesebir, S., & Diener, E. (2011). Income inequality and happiness. Psychological Science, 22, 1095-1100. Saez, E. (July 17, 2010). Striking it richer: the evolution of top incomes in the United States (update with 2008 estimates). Working Paper, University of California at Berkeley. Retrieved from: http://elsa.berkeley.edu/~saez/saez- UStopincomes-2008.pdf Uslaner, E.M. (2002). The moral foundations of trust. Cambridge, UK: Cambridge University Press. U.S. Census Bureau. (2009). Income inequality. Retrieved from http://www.census.gov/hhes/www/income/data/historical/inequality/index.html Western, B., Bloome, D, & Percheski C. (2008). Inequality among American families with children, 1975 to 2005. American Sociological Review, 73, 903–20. Zak, P. J., & Knack, S. (2001). Trust and growth. The Economic Journal, 111, 295–321. Zimmerman, F. J., & Bell, J. F. (2005). Income inequality and physical and mental health: Testing associations consistent with proposed causal pathways. Journal of Epidemiology and Community Health, 60, 513-521. doi:10.1136/jech.2005.040154 Methods Discussion College of William and Mary Gini coefficient Trust Gini Coefficient Trust Trust and Income Equality in the U.S. (1972-2009) The U.S.’s Gini Coefficient in Context South Africa (2005).650 Colombia (2009).585 Brazil (2009).539 Mexico (2008).517 United States (2007).450 Russia (2009).422 China (2007).415 Venezuela (2009).410 India (2004).368 U.K. (2005).340 Canada (2005).321 European Union (2009).304 Germany (2006).270 Norway (2008).250 References