Income inequality and social trust

We study how economic inequality affects social trust. We test this relationship both using correlational evidence from a large social survey of British youth as well as novel causal evidence from a series of online experiments. We find causal evidence that higher inequality has a negative impact on social trust. By contrast, a high relative position leads to higher social trust in both samples. In times where inequality is on the rise these findings are cause for concern. • We examine how economic inequality affects social trust using both observational and experimental data. • Correlational evidence from a large UK youth survey shows that individuals in a higher economic position report more trust. • We provide causal evidence from online experiments that higher inequality reduces social trust, while higher relative position increases it. • Our experimental design cleanly separates the effects of inequality exposure from relative economic position. • These findings highlight two distinct channels through which inequality undermines trust, raising concern in increasingly unequal societies.