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American Economic Review: Vol. 100 No. 5 (December 2010)

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Inherited Trust and Growth

Article Citation

Algan, Yann, and Pierre Cahuc. 2010. "Inherited Trust and Growth." American Economic Review, 100(5): 2060-92.

DOI: 10.1257/aer.100.5.2060

Abstract

This paper develops a new method to uncover the causal effect of trust on economic growth by focusing on the inherited component of trust and its time variation. We show that inherited trust of descendants of US immigrants is significantly influenced by the country of origin and the timing of arrival of their forebears. We thus use the inherited trust of descendants of US immigrants as a time-varying measure of inherited trust in their country of origin. This strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the twentieth century by controlling for country fixed effects. (JEL N11, N12, N31, N32, O47, Z13)

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Authors

Algan, Yann (Sciences Po, Paris)
Cahuc, Pierre (Ecole Polytechnique, Malakoff)

JEL Classifications

N11: Economic History: Macroeconomics; Growth and Fluctuations: U.S.; Canada: Pre-1913
N12: Economic History: Macroeconomics; Growth and Fluctuations: U.S.; Canada: 1913-
N31: Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: Pre-1913
N32: Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: 1913-
O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Z13: Economic Sociology; Economic Anthropology; Social and Economic Stratification


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