Learn to Be Distrustful: A Study of Generalized Distrust Across Europe

Generalized trust is a core component of social capital. Trust affects our social interactions, management of industrial organizations, any economic transaction, and political systems. Because of its myriad benefits, trust is an important non-pecuniary return to education. While most of the economic literature finds that education and generalized trust are positively correlated, this paper takes a different approach by instead shifting the focus to generalized distrust. Specifically, here I examine the effect of education on generalized distrust, using three different thresholds to define levels of distrust. Using data from the European Social Survey across 28 European countries, I conduct a 2SLS analysis, with compulsory education reforms as an instrument for individual years of education completed. I find that, using the strictest definition of distrust, an additional year of education is associated with 2.15 percentage point increase in the likelihood of being distrustful.