Social Trust and the Scars of (Youth) Unemployment: Evidence from a Long-Running Household Panel Study

While previous research suggests that unemployment leaves lasting scars on social trust, very little is known about the extent to which this relationship depends on the timing of unemployment in people’s life course. Our hypotheses derive from two competing theoretical approaches to stability and change in social trust – the settled-dispositions model vs. the active-update model, which we complement with insights from life-course research and the impressionable-years literature. Drawing on repeated measures from the Swiss Household Panel Study 2002-2023 and using fixed-effects regression models, we find that youth unemployment – but not unemployment occurring during mid-life – leaves a long-lasting scar on social trust. Our results also show that those scars are cumulative, as they get deeper with both the number and the duration of unemployment experiences. All in all, our findings add to the growing literature on the non-pecuniary costs of unemployment, while at the same time providing further empirical support for the hypothesis that social trust is malleable until early adulthood but immune to negative experiences afterwards.