Dr Leo Azzollini, Postdoctoral Research Officer at INET Oxford, explains how unemployment can corrode social trust. The World Bank recently listed Dr Azzollini's work on this topic as one of its essential readings.

Take a moment to think about your activities today. You may have used public transport to go to work, paid for lunch using a credit card, or left your bag in an open plan office. All these activities rely on social trust – the feeling strangers can be trusted. Social trust is fundamental to life in contemporary societies, as it facilitates cooperation with people we do not know – bus drivers, shopkeepers, colleagues and so on. Low social trust is associated with political instability and support for extremist political candidates.

But there are troubling signs for the labour market – and for social trust. The most recent Economic Activity and Social Change in the UK Reports suggest a slowdown in several labour market indicators in the past year. My recent study analysed data from 29 European countries and more than 200 sub-regions, including the UK, and found unemployment affects social trust in three main ways:

  1. Individuals who experience unemployment are relatively more socially distrusting than those who have never experienced joblessness.

  2. Short-term unemployment spikes do not appear to affect social trust.

  3. Unemployment matters in the long run: in regions where average unemployment was high over the previous decade, citizens are consistently less trusting.

The study also found that if you lose your job in an area where unemployment is low - such as the South East and South West of the UK - you are more likely to be stigmatised by those close to you and wider society, when compared to regions with high unemployment rates.

The findings suggest stigma is key to understanding what is going on. Losing work can scar a person’s trust in wider society, and lead them to focus inwards. But if you lose your job somewhere where joblessness is common, it does not affect your worldview so much, as social trust is lower anyway.

This is both good and bad news – while a short-term economic recession is unlikely to shake collective faith in society, regions with high-unemployment rates may be stuck in a trap where social distrust and poor labour performance are linked. And while trust may be resilient at a collective level, those who lost their jobs are more socially distrusting even in low-unemployment regions.

Azzollini Headshot
"Regions with high-unemployment rates may be stuck in a trap where social distrust and poor labour performance are linked." Dr Leo Azzollini, Postdoctoral Research Officer at INET Oxford

The damage caused by entrenched unemployment ripples out far beyond the individuals directly impacted, then; it can bring wide reaching, long lasting harm to our social fabric and community cohesion. Policy-makers therefore need to carefully consider labour market dynamics at regional levels within countries, as the vicious circle of unemployment and social distrust may be difficult to break, with potentially dire effects for contemporary democratic societies.

Read Dr Azzollini’s full study here.

Read the World Bank’s list of essential readings on the social externalities of employment here.