Social trust and the growth of schooling

Abstract

The paper develops a simple model to examine how social trust might affect the growth of schooling through lowering transaction costs associated with employing educated individuals. In a sample of 52 countries, the paper thereafter provides empirical evidence that trust has led to faster growth of schooling in the period 1960–2000. The findings are robust to the inclusion of a set of control variables and being estimated using an instrumental variables approach.

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