Early‐Life Circumstances Predict Measures of Trust among Adults: Evidence from Hunger Episodes in Post‐War Germany

• DOI: http://doi.org/10.1111/sjoe.12329
• Published date: 01 January 2020
• Date: 01 January 2020

Scand. J. of Economics 122(1), 280–305, 2020

DOI: 10.1111/sjoe.12329

Early-Life Circumstances Predict Measures

of Trust among Adults: Evidence from

Hunger Episodes in Post-War Germany*

Iris Kesternich

KU Leuven, B-3000 Leuven, Belgium

iris.kesternich@kuleuven.be

James P. Smith

RAND Corporation, Santa Monica, CA 90407-2138, USA

smith@rand.org

Joachim K. Winter

Ludwig-Maximilians-Universit¨at M¨unchen, DE-80539 Munich, Germany

winter@lmu.de

Maximiliane H¨orl

Ludwig-Maximilians-Universit¨at M¨unchen, DE-80539 Munich, Germany

Abstract

Can a major shock in childhood permanently shape trust? We consider a hunger episode in

Germany after WorldWar II, and we construct a measure of hunger exposure from official data

on caloric rations set monthlyby the occupying forces, providing regional and temporal variations.

Wecor relate hunger exposure with measures of trust using data from a nationally representative

sample of the German population. We show that individuals exposed to low caloric rations in

childhood have significantly lowerlevels of trust as adults. This finding highlights that early-life

experiences can have long-term effects in domains other than health, wheresuch effects are well

documented.

Keywords: Malnutrition; preference formation; preference heterogeneity;war shocks

JEL classification:D01; D74; J10; J62; N44; Z13

*The data in this publication were made available to us by the German Socio-Economic Panel

Study (SOEP) at the German Institute for Economic Research (DIW), Berlin. Wethank seminar

audiences at Harvard Health Care Policy,the Harvard Center of Population,IUPUI, the University

of Stirling, and the Workshop of New Empirical Developments in Health and Labor Markets

for helpful comments and suggestions. We gratefully acknowledge financial support through

the International Doctoral Program “Evidence-Based Economics” of the Elitenetzwerk Bayern

(M. H¨orl), the research funds of KU Leuven (I. Kesternich), the National Institute on Aging

(J. P. Smith), and the Deutsche Forschungsgemeinschaft via CRC/TR 190 (J. K. Winter).

Kevin Kloiber and Jannis St¨ockel providedvaluable research assistance.

C

The editors of The Scandinavian Journal of Economics 2018.

I. Kesternich et al. 281

I. Introduction

Trust has a decisive role in many human interactions. For example, when

we consider whether to engage in some form of cooperation with others,

it is crucial whether we believe this person is trustworthy (Gambetta,

2000). Societies with higher levels of trust tend to have better government

institutions, and thus higher economic growth (Knack and Keefer, 1997; La

Port a et al., 1997). Furthermore, measures of trust are important predictors

of economic activity in such diverse areas as stock market participation

(Guiso et al., 2008) and international trade and investments (Guiso et al.,

2009). Not much is known, however, about the underlying determinants of

trust and the reasons for the observed heterogeneity among people.

In this paper, taking a life-course perspective (Elder, 1998), we study

whether a major shock in individual experiences early in life – specifically,

the exposure to the experience of hunger – predicts trust later in adult life.

We construct a measure of exposure to hunger in Germany after World

War II (WWII) from data on caloric rations that were set monthly by the

occupying forces in the four occupation zones. We combine these exposure

measures with data from a random sample of the adult German population.

Thus, we document that individuals who were exposed to low caloric rations

in their childhood and youth show significantly lower levels of trust many

years after experiencing hunger.

Our analysis is motivated by a recent wave of research showing that

early-life circumstances and shocks, even those experienced in utero, not

only predict adult health outcomes (Barker, 1992, 2004; Almond and

Currie, 2011; van den Berg et al., 2015) but also socio-economic outcomes

later in life. Adult outcomes that are affected by shocks such as the

experience of war or exposure to prolonged periods of hunger early in life

include education and labor market status (Goodman et al., 2011; Juerges,

2013; Akbulut-Yuksel, 2014; Kesternich et al., 2014), preferences for food

consumption (Kesternich et al., 2015), the development of egalitarian

motivations (Bauer et al., 2014), and subjective well-being (Bertoni, 2015).1

This study is also related to an emerging body of economics literature

that argues that societal and institutional environments and individual

experiences over the life course can change preferences and expectations

(Fehr and Hoff, 2011; Malmendier and Nagel, 2011, 2016; Black et al.,

2017). More specifically, with respect to social preferences and trust,

Putnam et al. (1994) and Bigoni et al. (2015) argue that historical events

have shaped preferences for cooperation in Southern and Northern Italy

1Hunger has also been shown to have effectsin the ver y short run. In an experimental study, by

Aarøe and Petersen (2013), respondents with lowglucose levels show stronger support for social

welfare.

C

The editors of The Scandinavian Journal of Economics 2018.