CeDEx Seminar - Sigrid Suetens (Tilburg University)

Return on trust is lower for immigrants

Trustworthiness is key for successful economic and social interactions. We conduct an experiment with a representative sample of the Dutch population to study whether trustworthiness depends on the ethnicity of the interaction partner. Native trustees play trust games with an anonymous other, who is either another native or an immigrant. We find that the trustees reciprocate trust up to 12% less if the trustor is an immigrant than if he/she is native. This percentage increases up to 23% for trustees who report disliking ethnic diversity in society in an independent survey. Since the decision to reciprocate does not involve any behavioral risk, we take our results as evidence of taste-based discrimination. The implication is that the return on trust is lower for immigrants than for native Dutch.