Patterns of Trust and Subjective Well-Being Across Europe: New Insights from Repeated Cross-Sectional Analyses Based on the European Social Survey 2002–2016

One important goal for the society as a whole is to increase happiness and well-being. Until recently, the gross domestic income of a country was considered as the major indicator for a good quality of life (Oishi and Schimmack 2010). This economic view relies on the assumption that higher prosperity automatically leads to higher utility and that all members of society profit from a country’s affluence to a similar extent. Today, more and more researchers as well as politicians take a more straightforward path and use subjective indicators, mainly collected through surveys, to measure quality of life (Diener et al. 2015). This approach focuses upon individual´s appraisals of their own life. The most prominent indicator for this purpose is subjective well-being (SWB), which is composed of positive affect, the lack of negative affect, happiness and life satisfaction (e.g. Diener et al. 2012).¹

On the individual level, various key aspects have been identified which promote SWB, like the family status (being married), the state of health, social inclusion (many social contacts), income etc. (Dolan et al. 2008; Puntscher et al. 2015). On the country level, there is still a controversial debate on the 45-year-old Easterlin paradox (1974), on the thesis that an increase in a country’s gross domestic product does not increase SWB in the long run. According to the paradox, prosperity gains do not foster happiness once a country has achieved a certain degree of affluence (Easterlin et al. 2010; Easterlin 1974).

In the last decade, there has been growing interest in the relation of trust as part of social capital and SWB. Social capital has proven to be one of the key drivers for high SWB, both on the individual (e.g. Bartolini et al. 2013b; Helliwell and Huang 2011; Helliwell and Putnam 2004) and aggregate level (e.g. Bjørnskov 2008). Originally described as the individual resources that one receives from the possession of a durable network by Bordieu (1986), various scholars contributed different definitions of social capital (e.g. Coleman 2000; Putnam 2001), leading to a vague and abstract perception of this concept (see Bjørnskov and Sønderskov 2013). However, more and more researchers agree on the multidimensional nature of social capital, consisting of at least three distinct dimensions, namely (1) networks (e.g. informal relationships, volunteering, organizational memberships, …); (2) norms (e.g. shared norms, civic values, …); and (3) trust (e.g. social trust, institutional trust …) (e.g. van Oorschot and Arts 2005).

This paper focuses upon on the impact of social as well as institutional trust on SWB from an individual cross-sectional as well as an aggregate cross-sectional and longitudinal perspective considering survey data from 35 European countries and Israel. Social trust, on the one hand, is the touchstone of social capital as it reflects generalized reciprocity. “I´ll do this for you now, without expecting anything immediately in return and perhaps without even knowing you, confident that down the road you or someone else will return the favor” (Putnam 2001: 134). The core idea behind this effect is that social trust fosters social cohesion. Social networks among family, friends, colleagues at work and in the neighborhood give people a feeling of security, even to people who themselves are not part of the network; thus “social networks have value” (Helliwell and Putnam 2004: 1436).

Institutional trust on the other hand is conceptually distinct from social trust as it includes trust in governments, political authorities or other social institutions. High institutional trust can also foster SWB as a subjective measure of the quality of regional institutions, preventing to feel powerless and helpless within the society (Kroll 2008). From a functionalistic perspective, trust in institutions has an essential complexity reducing effect since individuals delegate responsibility and by this decrease transaction costs (e.g. Benz 2002: 275). Cultural theorists argue that trust in the state can be achieved through “knowing the basic idea or good of an institution” and “its constitutive rules, values, and norms” (Warren 1999: 6–7). If institutions stick to the prevailing norms, make fair promises, prove to be reliable and offer participation, citizens will trust in them. Finally, also trust in institutions might contribute to a feeling of certainty and security that have a positive impact on the quality of life.

Although multiple studies found a robust relation between social as well as institutional trust and SWB on a cross-sectional level, longitudinal country-comparative analyses show ambivalent results and in many cases too small numbers of dates in order to provide meaningful results. In addition, findings from single-case analyses or a small number of countries are hard to generalize. For this reason, we extent previous research to get a deeper understanding about the relationship between trust and SWB. We use the European Social Survey (ESS), which allows analyzing these relations on the individual level but also over time on the aggregate level using eight waves from 2002 to 2016 (2004, 2006, 2008, 2010, 2012, 2014). In this period, most of the European countries were hit hard by the consequences of the global financial crisis, which lead to an economic downturn, increasing unemployment and sovereign debt crisis. In particular, Southern and Eastern European countries faced far-reaching economic and social losses. Moreover, disenchantment with politics has increased in many western countries (Dalton and Weldon 2005). Against this background, the paper addresses the following research questions:

First, we will briefly introduce a review about previous studies in this research field. We focus on (a) time trends of well-being, social and institutional trust, (b) the cross-sectional relation between trust and SWB and (c) findings from longitudinal analyses. The subsequent section on methods and data describes the European Social Survey and the additional macro-data (e.g. GDP per capita, inflation and unemployment rate) used for our analyses as well as the coding of our variables. The results section starts with the overall change of subjective well-being and social as well as institutional trust, followed by cross-sectional analyses on the impact of trust on SWB and an extensive longitudinal analysis. Additional analyses can be found in the supplementary material. Discussion of the results and conclusions close the paper in the last section.

For our study, we use the European Social Survey (ESS). The ESS is conducted every 2 years via face-to-face interviews and consists of a core module and a rotating module, which varies every 2 years. In the first round, which took place in 2002, 22 countries participated in the ESS. Fifteen took part in every round since then; four more skipped not more than one round. A total of 36 countries conducted the survey at least once with two more countries (Montenegro and Serbia) following in 2018. In total, the ESS dataset consists of 393.495 individuals nested in 36 countries and eight time-points. The core module of the ESS contains sociodemographic variables as well as items to measure trust and subjective well-being.

We start our analyses with a descriptive overview of the trends of subjective well-being as well as social and institutional trust in the selected European countries and Israel. With a mean of 7.2–7.4, Fig. 1 shows high levels of subjective well-being across European countries and on average a positive trend from 2002 to 2016. In 2002, 89% of the Europeans are satisfied or extremely satisfied with their lives; in 2008 we can find the lowest level of satisfaction with 84% and in 2016 the highest level of satisfaction with 91%.

Figure 2 illustrates the changes of the central independent variables of social and institutional trust. With means of 4.6–5.5, average social and institutional trust are distinctly lower than subjective well-being, albeit trust in others is more pronounced across Europe than trust in various institutions. Taking into account the changes of social trust from 2002 to 2016, a positive linear trend is obvious, the mean increases from 5.3 to 5.5. In contrast, institutional trust slightly decreases from 4.8 to 4.7 in this period and does not show a clear pattern, since it is lowest from 2010 to 2014 but also in 2004. Overall, subjective well-being as well as social and institutional trust though are rather stable across time, showing only minor changes from 2002 to 2016 on average.

After depicting our descriptive data, we continue with the latent growth curve models, examining how SWB and trust developed in Europe from 2002 to 2016 (see Table 2). We analyzed the data both with a linear as well as with a quadratic time term. For the quadratic effect, we use the orthogonal rather than the natural quadratic term to avoid a correlation between the linear and quadratic time effect (see Mirman 2014). After the comparison of different models with different goodness-of-fit indices, we included linear random slopes in addition to random intercepts. Since we use the orthogonal rather than the natural quadratic effect, we can interpret the intercepts as a mean across all time points (Mirman 2014).

Corresponding to the descriptive results the mean level of SWB is 7.3 on a 0–10 scale and thus higher than those of social- and institutional trust with means of 5.4 and 4.7 (see Table 2). SWB shows a positive linear trend,⁴ however, the variation between countries is quite large. Nevertheless, despite Ireland (where SWB shows a negative trend), Germany and Poland (where we see a significantly higher increase in subjective well-being compared to the fixed effect and thus all countries combined), all remaining countries show coefficients which do not differ significantly from the reported fixed effect of 0.15. This result is in accordance to the findings of Alessi et al. (2018), who showed that Germany and Poland suffered the least from the economic crisis while Greece, Ireland, Latvia, and Croatia suffered the most. Unfortunately, our dataset only contains four time-points for Greece (02′, 04′, 08′, 10′), two for Latvia (06′, 08′) and two for Croatia (08′, 10′) which are not part of the latent growth curve model (see method section). During the economic crisis, we see a distinct drop of SWB in Greece of − 0.2 points from 2004 to 2008 resp. − 0.7 points from 2004 to 2010. In Latvia, we observe a small decrease of − 0.1 points in SWB from 2006 to 2008 and Croatia shows a drop of − 0.25 points from 2008 to 2010.

While social trust shows a significant positive linear trend, institutional trust does not vary across time. A close look on different countries reveals that institutional trust shows a positive trend in Norway and Sweden but a negative trend in Spain, Slovenia and Portugal. Overall, as indicated by the random slopes, the development of institutional trust across Europe is far from homogenous and strongly varies across different countries. If we take a closer look on the countries which are most affected by the economic crisis in terms of SWB loss (Alessi et al. 2018), we see no decline of social trust in Greece, Latvia, and Croatia, but a drop of approximately -0.3 points in Ireland from 2008 to 2010. All four countries, however, show a clear decrease in institutional trust during this period. In Greece, institutional trust drops − 0.8 points from 2004 to 2008, and − 2.1 points from 2004 to 2010. In Latvia and Ireland, we see a decrease of − 0.4 points from 2006 to 2008 while Croatia shows a decline of − 0.3 points from 2008 to 2010. Differences across countries regarding trends in SWB and trust are depicted in the Figures A1 to A3 in the supplementary material.

We continue with the analysis regarding the relation between SWB and trust. At the beginning, we use multilevel modelling to analyze the individual cross-sectional relation between trust, our control variables and SWB by means of a pooled dataset including all eight time-points of the ESS. Besides individual trust, we include aggregate trust for every country and time-point as predictor variables to our models. We include random slopes (between countries) for both trust variables in addition to random intercepts for countries and ESS time-points. Moreover, we run separate models for developed countries and post socialist transition countries (see Table 3). For the whole dataset, 18.2% of the variation in SWB is due to differences across countries as described by the intraclass correlation (ICC). This variation is higher in developed countries (10.5%) compared to former socialist transition countries (6.1%). Overall, our model explains 40.5% of variance whereas our fixed effects explain 37.7%.

Regarding our control variables, many social contacts, high subjective health and high household income are positively related with high SWB. Moreover, female, employed and married respondents report higher SWB. Age on the other hand is negatively related to SWB whereas age square is positively related, indicating a u-shaped relation. Higher education shows a small positive effect on SWB in transition countries, but a small negative effect in developed countries. Regarding our variables of interest, individual social and institutional trust are positively related to SWB, in the whole sample as well as in transition and developed countries. Moreover, aggregate social trust shows a particular high relation with individual SWB compared to individual social trust, whereas aggregate institutional trust shows a small negative, non-substantial relation with SWB.

Since we included random slopes for social as well as institutional trust in our model, it is possible to analyze if the impact of individual social and institutional trust on SWB varies between countries. The variation regarding social trust is low, coefficients range from 0.06 to 0.21, whereas 34 of 36 countries (94%) show an unstandardized beta coefficient between 0.12 and 0.21. For institutional trust we see more variation: Overall, Nordic and Central European countries tend to show a weaker relation whereas Southern and Eastern European countries show a stronger relation. Specifically, for Denmark, Iceland, Estonia, the Netherlands, Belgium, Finland, Switzerland, Sweden, Norway, Israel, Slovenia, Austria, Poland, Great Britain and Italy, we see a positive relation between institutional trust and subjective well-being ranging from 0.01 to 0.10. A stronger correlation can be found in the Czech Republic, Portugal, Greece, Estonia, Romania, Russia, Albania, Hungary, Latvia, Turkey, Lithuania, Ukraine and Bulgaria (with unstandardized beta coefficients between 0.14 and 0.24). This result is in accordance to the stronger effect of institutional trust on SWB for transition countries since this country group strongly overlaps with Eastern European countries.

As a last step, we analyze the relation between trust and subjective well-being on the aggregate level by using a repeated cross-sectional design. In the first model, we include a dummy variable for transition countries in order to control for differences in SWB between our two country groups. Further, we include our control variables log₂ of GDP per capita, inflation, unemployment and income inequality (Gini coefficient). Step by step, we include social trust and institutional trust in our models (see model 3 and 4 in Table 4). At the end, we analyze differences between certain countries as well as between developed and transition countries.⁵ Besides the described control variables, we additionally included a group-mean centered “ESS round” variable as well as it´s square in every model to control for linear as well as quadratic time effects. The results are depicted in Table 4.

As we see, SWB is lower in transition countries compared to developed countries. In accordance to the literature, this effect vanishes after including our control variables (see Nikolova 2016, see model 2 to 5 in Table 4). Altogether, our models show a good fit. With our predictor variables, we can explain between 72.5% (including macroeconomic control variables) and 82.1% (including control variables and trust) of variance, whereas the full models (including random effects) explain approximately 97% of variance. Further, we calculated six additional models, each including just one of our six predictor variables (see Table 5). This way we can estimate the unique effects of our variables on SWB. Log₂ of GDP, social trust and institutional trust show the strongest effects on SWB by explaining around 65% of variance each. Unemployment, inflation and income inequality (Gini) show a noticeable smaller effect by explaining 20–34% of variance.⁶

Despite this positive effect of economic growth (log₂ of GDP growth) on subjective well-being (see Table 5), this relation vanishes and becomes insignificant after including the remaining control variables (Table 4, model 2–5). For a better understanding, we run the model again by first including log₂ of GDP and afterwards unemployment, inflation or the Gini coefficient to our model (results upon request from the authors). This analysis indicates that unemployment is the key mediating variable which leads to this vanished effect of economic growth on subjective well-being. Further, we see that countries with a higher log₂ of GDP report higher subjective well-being, and that a 1% decrease in unemployment (and inflation) leads to an increase of 0.04 (0.03) points in aggregate subjective well-being (scale: 0–10) over and above economic growth, income inequality, social trust and institutional trust. Income inequality on the other hand, measured by the Gini coefficient, is not related to SWB. This is in accordance to previous literature (Di Tella et al. 2001; Lopes et al. 2014; Ngamaba et al. 2018).

Regarding trust, we see that both growth-(within) and level-(between) effects of social as well as institutional trust foster SWB. After we include both trust variables in model 5, we see that only the growth effect of social trust and the level effect of institutional trust remain significant. An increase of aggregate social trust by one point leads to an increase in aggregate subjective well-being of 0.53 points over time. Increasing institutional trust by one point, on the other hand, shows only a small, non-significant impact on aggregate subjective well-being by an increase of 0.07 points. Therefore, increasing social trust leads to an increase in SWB over time while an increase in institutional trust does not affect SWB. Individuals who live in countries with a high level of institutional trust on the other hand report higher levels in SWB. These findings shed light on previously reported ambiguous relations between institutional trust and SWB (Bartolini et al. 2013a; Kroll 2008). Our analyses show a cross-sectional relation between institutional trust and SWB on the individual and the aggregate level, but no relation over time on the aggregate level. This implies that omitted confounding variables are the reason for the cross-sectional relations, while institutional trust ceteris paribus does not affect SWB.

The aim of this paper was to replicate and extent previous research about the relation between social and institutional trust and subjective well-being. Overall, we analyzed how trust and SWB developed in Europe from 2002 to 2016 and investigated the effect of trust on SWB—on the cross-sectional individual and aggregate level as well as over time. We used the European Social Survey (ESS) to answer these research questions, consisting of survey responses from over 390,000 individuals nested in 36 countries within eight time points.

Over and above the impact of trust and in accordance with previous studies, we found a positive effect of decreasing unemployment and inflation on SWB on the aggregate level. Therefore, our study confirms previous cross-sectional studies (Di Tella et al. 2001; Lopes et al. 2014) which reported the same positive effects by using longitudinal data. In line with previous studies (e.g. Ngamaba et al. 2018), we found no effect of income inequality on SWB. Nevertheless, previous research showed that income inequality has a negative effect on life satisfaction inequality as well as on social trust (Graafland and Lous 2019), which implies that reducing income inequality can be a desirable goal after all (see also Deeming and Jones 2015: 277). Regarding economic growth, the Easterlin-paradoxon states that economic growth only fosters subjective well-being in the short run but not in the long run (10 years or more; Easterlin et al. 2010). Our results are in line with the Easterlin-paradoxon since we found a positive effect of economic growth in the short run (2 years) on subjective well-being without the consideration of control variables (see Table 5). After controlling for unemployment, this effect vanished and remained small and insignificant after including the remaining variables into our model. This result is in line with “Okun´s Law”, a rule of thumb which states that increasing economic growth leads to a decreasing unemployment rate (see Knotek 2007).

Contrary to previous literature (e.g. Mikucka et al. 2017), we found a negative effect of GDP growth on subjective well-being after the inclusion of all control variables for developed countries in Europe. Since this subgroup represents homogeneous affluent countries, this finding indicates not only a diminishing marginal utility of GDP, but rather a negative effect of GDP growth at a certain level. This finding however is exploratory and is not of major interest for our analyses. We thus encourage future research to further investigate the effect of GDP growth on SWB in prosperous countries by using recent longitudinal data and multilevel designs.

Regarding the development of trust and SWB over time, our findings show that social trust as well as subjective well-being slightly increased since 2002 despite high levels in the first place. The lowest level of SWB can be observed in 2008 which indicates a temporary consequence of the worldwide economic crisis that, however, did not influence the European’s trust. A close look on the four countries which were most affected by the economic crisis in terms of SWB loss (see Alessi et al. 2018) also shows that only one of those countries faced a small decrease in social trust. However, all four countries suffered from a moderate loss in institutional trust during this period. Overall, our data tentatively suggests that countries which were more affected by the economic crisis (e.g. Greece, Latvia, Croatia, Spain, Portugal) show a decline in institutional trust while less affected countries (e.g. Norway, Sweden, Switzerland, Germany) show no decline or even an increase in institutional trust (see also appendix A2). Overall, our data reveal heterogeneous trends across Europe, particularly in regard of the development of SWB and institutional trust.

In accordance to previous research (e.g. Bjørnskov 2008; Helliwell et al. 2018; Mikucka et al. 2017), we observed a positive effect of social trust on subjective well-being. This positive effect emerged on different levels which all draw a coherent picture. First, we found a positive effect of individual social trust on subjective well-being on the individual cross-sectional level for every participating country. Based on this result, we infer that this effect is independent from country-varying differences, which implies that social trust touches an encompassing basic need fostering social cohesion in modern societies. Second, the country level of social trust (aggregate social trust) fosters individual subjective well-being, whereas this effect is particularly stronger than the effect of individual social trust. Thus, living in a trusting environment is particularly beneficial for individual subjective well-being. This finding is also in accordance to our longitudinal repeated cross-sectional design which implies that increasing aggregate social trust leads to an increase in aggregate subjective well-being. This result holds both for developed and transition countries over and above the control variables. Social trust is often considered as a prerequisite for social networks as it fosters social cohesion (Kawachi 2008; Helliwell and Putnam 2004: 1436). Based on psychological theories like the ‘need to belong’ theory (Baumeister and Leary 1995), social networks meet innate needs since humans are in fact, i.a. evolutionary justified,—social beings. With this study, we show that social trust as prerequisite of social cohesion does not only foster well-being on the individual level, but also on the aggregate country level, indicating that a socially trusting society is a happy society.

Regarding institutional trust, we see a different picture. In line with previous research (e.g. Puntscher et al. 2015; Leung et al. 2011), we found a positive effect of institutional trust on subjective well-being on the individual cross-sectional level. This relation however varies between countries, with bigger effect sizes in less prosperous-, and smaller effect sizes in prosperous countries. Opposed to our findings regarding social trust, this implies that the effect of institutional trust on subjective well-being depends on omitted confounding variables due to cultural differences. The longitudinal analysis supports this finding by showing a cross-sectional, but no longitudinal relation on the aggregate level. Since less affluent, formerly socialist countries show a stronger relation, low institutional trust could be associated with a general climate of political distrust which could be the reason for this cross-sectional spurious relation. However, more research is needed to fully understand the underlying mechanisms behind the cross-sectional relation between institutional trust and subjective well-being.

By interpreting our results, we have to take certain restriction into account. First of all, our statistical analysis does not allow to derive causality. Thus, besides the theoretical background, we cannot tell for sure if social trust fosters subjective well-being or the other way round. Second, this analysis relies on a homogeneous sample of European countries and Israel. Thus, our results have restricted generalizability for further countries since differences regarding macroeconomic structures could alter these relations. Moreover, regarding the development of trust and SWB over time, we only analyzed countries with at least seven time-points, resulting in a sample with prosperous countries overrepresented.

In sum, our results indicate that an increase in social trust within countries over time leads to higher subjective well-being. Thus, social trust seems to be crucial for Europe´s well-being and should be considered as an important indicator for social policy besides GDP per capita, inflation and unemployment. Despite the negligible (nil) effect of economic growth on subjective well-being in the long run (see Easterlin et al. 2010), its positive effect in the short run seems to be moderated by decreasing unemployment. Thus, our data suggests that additional policies to lower unemployment could potentially be as beneficial for society’s well-being as economic growth. Additionally, decreasing inflation leads to higher subjective well-being as well. High institutional trust on the other hand only affects subjective well-being on the individual and aggregate cross-sectional level but not over time, indicating a spurious effect created by omitted confounding variables.