Return on Trust is Lower for Immigrants

Abstract

We conducted an experiment with a representative sample of the Dutch population to study whether trustworthiness depends on the ethnicity of the interaction partner. Native Dutch trustees play with an anonymous trustor, who is either another native Dutch or a non-Western immigrant. We find that trustees reciprocate trust up to 12% less if the trustor is a non-Western immigrant than if he/she is native Dutch. This percentage increases up to 23% for trustees who report disliking ethnic diversity in an independent survey. Since the decision to reciprocate does not involve behavioural risk, our results provide evidence of taste-based discrimination.