Pre- and Post-crisis Life-Satisfaction and Social Trust in Transitional Countries: An Initial Assessment

The purpose of this paper is to assess changes of life-satisfaction and trust in transitional countries as well as their interaction resulting from the global economic and financial crisis of 2007, and its aftermath. For all indicators used, the level of life-satisfaction significantly decreased in transitional countries after the crisis. The smallest reduction can be observed in general life-satisfaction, while the reduction was larger for economic satisfaction and for confidence in better life of children. However, change in post-crisis trust experienced a mixed picture. Levels of institutional trust decreased after crisis, while the degree of interpersonal trust increased. Interpersonal trust continued to have a positive impact on life-satisfaction after the crisis, but the magnitude of its effect stagnated during the post-crisis period. Conversely, the significant magnitude of institutional trust effect grew after crisis for all types of indicators used. These findings suggest that both interpersonal and institutional trust, which are used here as indicators of social capital, are powerful resources that can directly improve life-satisfaction during transition. Most importantly, these resources can be employed to mitigate the outcomes of the crisis.