Fear of the Dark: How Terrorist Events Affect Trust in the Long Run

In this paper, we provide new evidence on whether individuals differ in their level of trust depending on their exposure to unexpected terrorist attacks during crucial life phases. In line with the well-grounded psychological theories on the formation of human beliefs, attitudes, and values, we find that exposure to traumatic and violent events in the two essential stages of human development adolescence and early adulthood reduces trust in other people. The formed values tend to be persistent over time, and the results are robust to several checks.