Social welfare programs and trust: Evidence from six latin American cities

Abstract

Using individual-level data that are representative at the city level for six Latin American capital cities (Bogota, Buenos Aires, Caracas, Lima, Montevideo, and San José ), we find that participation in government social welfare programs is negatively associated to trust, a result that is robust to the inclusion of individual risk measures and a broad array of controls. Our findings support the notion that low take-up rates may be linked to stigma and not to high transaction costs as commonly suggested.