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Dominik Enste / Lena Suling / Inga Schwarz IW-Report No. 51 16. October 2020 Trust in Others is Worthwhile: Causes and Consequences of Trust at the Individual Level

Generalized trust in other people is especially important in times of crisis. If there is a lack of trust, more control and sanctions are necessary, which result in transaction costs. In addition, all people suffer from control measures, even if only a few show wrongdoings.

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Causes and Consequences of Trust at the Individual Level
Dominik Enste / Lena Suling / Inga Schwarz IW-Report No. 51 16. October 2020

Trust in Others is Worthwhile: Causes and Consequences of Trust at the Individual Level

IW-Report

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Generalized trust in other people is especially important in times of crisis. If there is a lack of trust, more control and sanctions are necessary, which result in transaction costs. In addition, all people suffer from control measures, even if only a few show wrongdoings.

As various studies show, higher interpersonal trust ensures, among other things, for more cooperation, more prosperity, more life satisfaction, and better health. Determinants of interpersonal trust are only to a small extent personality traits. Education and cultural influences are more important. Recommendations for action to strengthen interpersonal trust are therefore aimed at the classic areas of (early childhood) education and labor market policy, which also increase trust in fellow human beings. Inclusion also counteracts distrust and cynicism.

This applies dealing with diversity as well as designing inclusive growth. A general recommendation - which is empirically proven here - probably comes from the 6th century BC and from Laotse: "If you don't trust, you won't be trusted." The report encourages – fact-based – to trust more.

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Causes and Consequences of Trust at the Individual Level
Dominik Enste / Lena Suling / Inga Schwarz IW-Report No. 51 16. October 2020

Dominik Enste / Lena Suling / Inga Schwarz: Vertrauen in Mitmenschen lohnt sich – Ursachen und Konsequenzen von Vertrauen auf der Individualebene

IW-Report

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The Impact of the Corona Pandemic Compared with Earlier Economic Crises
Hubertus Bardt / Michael Grömling IW-Trends 20. April 2021

The Impact of the Corona Pandemic Compared with Earlier Economic Crises

The current economic crisis has become a crisis of consumption and has taken on more extreme dimensions than that caused by the global financial market upheavals of 2008/2009. In the 15 years preceding the outbreak of the Corona pandemic in Germany, private ...

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Dominik Enste / Mara Grunewald / Louisa Kürten IW-Trends No. 2 10. July 2018

A Culture of Trust as a Competitive Advantage in Digital Times

For companies, a lived culture of trust is an important competitive advantage. Particularly in an era of digitalization and increasing complexity, trust provides a sound basis for successful cooperation.

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