The shadow of the family: Historical roots of social trust in Europe.

This study provides new evidence on how historical patterns of household formation shape the present-day level of trust. We test two distinct features of historical family arrangements that might be harmful to trust towards out-groups: (a) family extendedness in terms of the number of household members, and (b) generational hierarchy and gender relations within the household. To conduct our study, we compiled a historical database that reflects family structure and socio-economic development, mostly in the 19th century. The analysis was performed on a sample of 94 historical subnational units within eight contemporary Western and Eastern European countries that participated in the Life in Transition Survey in 2010. We find that cohabitation of several generations within the historical family and power of older generations over the younger are detrimental for out-group trust today. By contrast, family extendedness per se was revealed to have no impact on trust.

Bridging the gap between multilevel modeling and economic methods.

Many datasets used in the social sciences have a hierarchical structure, where lower units of aggregation are 'nested' in higher units. In many disciplines, such data are analyzed using multilevel modeling (MLM, also known as hierarchical linear modeling). However, MLM as a framework is relatively unknown in economics. Instead, economists use a range of separate econometric methods, including cluster-robust standard errors, fixed effects models, models with cross-level interactions, and estimated dependent variable models. Relying on an extensive literature review, this paper describes this methodological divide and provides a detailed comparison between MLM and 'economic methods' in their abilities to deal with three methodological challenges inherent in multilevel data ‒ clustering, omitted variables, and coefficients' heterogeneity across groups. We unfold the comparative advantages of these two methodological approaches and provide practical recommendations about which of them should be used, why, and in what settings.