GINI DP 20: Does Income Inequality Negatively Affect General Trust? Examining three potential problems with the inequality-trust hypothesis

Many studies on the consequences of income inequality find that where inequality is high, trust is low. There are, however, reasons to examine the relation between inequality and trust more closely. First, previous research does not differentiate between the effect of income inequality and that of national wealth. Furthermore, the underlying mechanism is often unclear. Finally, the association might be dependent on non-Western countries where income inequality is extremely high. In this paper, we evaluate whether there is a relation between income inequality and trust in a sample of Western developed economies when taking into account national wealth. Theoretically, we distinguish between stratification effects and perception effects of inequality. Empirically, besides actual income inequality and national wealth, we include a measurement of perceived inequality on the basis of individual level earnings estimations for stereotypical jobs. We find no significant effect of inequality on trust when taking into account national wealth, suggesting that in Western countries the amount of resources rather than its distribution explains trust. Key words: trust, income inequality, perceived inequality, national wealth, comparative research.

GINI DP 6: Income Inequality and Participation: A Comparison of 24 European Countries

Previous research suggests that where inequality is high, participation is low. Two arguments are generally put forward to explain this finding: First, inequality depresses participation because people have diverging statuses and therefore fewer opportunities to share common goals. Second, people may participate more in social and civic life when they have more resources to do so. However, up till now, these explanations have been lumped together in empirical analyses. Using EU-SILC data for 24 European countries, we analyse how inequality in different parts of the income distribution is related to civic, cultural and social participation. Results indicate that a substantial part of the impact of inequality manifests itself through resources at the individual and societal level. However, independent of resources, it is still the case that higher inequality magnifies the relationship between income and participation. This is in line with a view that inter-individual processes explain why inequality diminishes participation.

Educated Preferences or Selection Effects? A Longitudinal Analysis of the Impact of Educational Attainment on Attitudes Towards Immigrants

While previous studies unequivocally show that education and attitudes towards immigrants correlate, the underlying mechanisms remain debated. The liberalization effect claims that education fosters egalitarian values and analytic skills, which translate into positive attitudes. Additionally, the higher educated are less likely to face economic competition from immigrants. However, research on socialization shows that political attitudes develop early in life. Thus, there may be self-selection into education. While there is reason to expect both education and selection effects, previous work has relied exclusively on cross-sectional analyses, thus confounding the two mechanisms. Drawing on the Swiss Household Panel, we find that virtually all variation in education disappears when only within-individual variance is modelled. While we find strong differences in attitudes towards immigrants between individuals, we observe little change in attitudes as individuals pass through education. Furthermore, our findings show that when entering the labour market, higher educated individuals also become more likely to oppose immigrants. This suggests that differences between educational groups are mostly due to selection effects, and not to the alleged liberalizing effect of education. We conclude that future research on attitudes towards immigrants would greatly benefit from addressing selection into educatio

Ethnic inequality in retirement income: a comparative analysis of immigrant-native gaps in Western Europe

Previous research unequivocally shows that immigrants are less successful in the labour market than the native-born population. However, little is known about whether ethnic inequality persists after retirement. We use data on 16 Western European countries from the European Union Statistics on Income and Living Conditions (EU-SILC, 2004–2013) to provide the first comparative study of ethnic inequalities among the population aged 65 and older. We focus on the retirement income gap (RIG) between immigrants from non-European Union countries and relate its magnitude to country differences in welfare state arrangements. Ethnic inequality after retirement is substantial: after adjusting for key characteristics including age, education and occupational status, the average immigrant penalty across the 16 countries is 28 per cent for men and 29 per cent for women. Country-level regressions show that income gaps are smaller in countries where the pension system is more redistributive. We also find that easy access to long-term residence is associated with larger RIGs, at least for men. There is no clear evidence that immigrants’ access to social security programmes, welfare state transfers to working-age households or the strictness of employment protection legislation affect the size of the RI

Discrimination against Turkish minorities in Germany and the Netherlands: field experimental evidence on the effect of diagnostic information on labour market outcomes

Previous studies have found that the labour market outcomes of Turkish minorities are slightly better in Germany than in the Netherlands. In this paper we test one of the explanations: differences in ethnic discrimination in hiring. We use a harmonised field experiment to test whether discrimination against job candidates of Turkish origin (age 23-25) varies across Germany and the Netherlands, while holding individual characteristics of job seekers constant. We find that, compared to majority candidates, job candidates of Turkish origin are on average eleven percentage points less likely to receive a positive call-back. Moreover, we find that discrimination against Turkish minorities is significantly higher in the Netherlands than in Germany. In Germany, job candidates of Turkish origin are five percentage points less likely to receive a call-back than equally qualified majority candidates, whereas in the Netherlands this ethnic gap is fifteen percentage points. However, the presented evidence does not support the often-mentioned argument that the amount of diagnostic information in application materials explains why discrimination against Turkish minorities is lower in Germany. Overall, adding diagnostic information has little effect on the relative employment chances of job applicants of Turkish origin, both in Germany and the Netherlands

Muslim by default or religious discrimination? Results from a cross-national field experiment on hiring discrimination

We use data from a cross-nationally harmonised field experiment to examine discrimination towards Muslim job applicants in five European countries (Germany, the Netherlands, Norway, Spain and the United Kingdom). We focus on job applicants originating from countries that have a substantial Muslim population: of these, some signalled closeness to Islam in their job application while others did not. With this design, we can empirically disentangle anti-Muslim discrimination (a ‘disclosed Muslim’ effect) from the possible stigma of originating from countries where Islam is prevalent (a ‘Muslim by default’ effect). Our double-comparative design allows us to compare the extent of anti-Muslim discrimination faced by different origin groups in destination countries characterised by a varying history of church-state relations and distinctive approaches to grant cultural and religious rights to minorities. We find alarming levels of discrimination, especially towards male applicants from more visible groups. Anti-Muslim discrimination and origin-based discrimination independently contribute to the severe disadvantage faced by ethnic and religious minorities, a disadvantage that is especially severe in the Norwegian labour market

Gender Discrimination in Hiring: Evidence from a Cross-National Harmonized Field Experiment

Gender discrimination is often regarded as an important driver of women's disadvantage in the labour market, yet earlier studies show mixed results. However, because different studies employ different research designs, the estimates of discrimination cannot be compared across countries. By utilizing data from the first harmonized comparative field experiment on gender discrimination in hiring in six countries, we can directly compare employers' callbacks to fictitious male and female applicants. The countries included vary in a number of key institutional, economic, and cultural dimensions, yet we found no sign of discrimination against women. This cross-national finding constitutes an important and robust piece of evidence. Second, we found discrimination against men in Germany, the Netherlands, Spain, and the UK, and no discrimination against men in Norway and the United States. However, in the pooled data the gender gradient hardly differs across countries. Our findings suggest that although employers operate in quite different institutional contexts, they regard female applicants as more suitable for jobs in female-dominated occupations, ceteris paribus, while we find no evidence that they regard male applicants as more suitable anywhere.This project received funding from the European Union's Horizon 2020 research and innovation program under grant agreement No 649255; the Research Council of Norway, grant number 287016; The Netherlands Organization for Scientific Research (NWO), (016.Vidi.185.041). We thank Laura García Llamas and Louis Klobes for valuable research assistance

Inequalities' Impacts: State of the Art Review

By way of introduction This report provides the fi rm foundation for anchoring the research that will be performed by the GINI project. It subsequently considers the fi elds covered by each of the main work packages: ● inequalities of income, wealth and education, ● social impacts, ● political and cultural impacts, and ● policy effects on and of inequality. Though extensive this review does not pretend to be exhaustive. The review may be “light” in some respects and can be expanded when the analysis evolves. In each of the four fi elds a signifi cant number of discussion papers will be produced, in total well over 100. These will add to the state of the art while also covering new round and generating results that will be incorporated in the Analysis Reports to be prepared for the work packages. In that sense, the current review provides the starting point. At the same time, the existing body of knowledge is broader or deeper depending on the particular fi eld and its tradition of research. The very motivation of GINI’s focused study of the impacts of inequalities is that a systematic study is lacking and relatively little is known about those impacts. This also holds for the complex collection of, the effects that inequality can have on policy making and the contributions that policies can make to mitigating inequalities but also to enhancing them. By contrast, analyses of inequality itself are many, not least because there is a wide array of inequalities; inequalities have become more easily studied comparatively and much of that analysis has a signifi cant descriptive fl avour that includes an extensive discussion of measurement issues. @GINI hopes to go beyond that and cover the impacts of inequalities at the same time