Market Activities and Trust of North Korean Refugees

This study investigates the effects of North Koreans’ informal market activities on their trust. Using survey data on North Korean refugees living in South Korea, we find that North Korean refugees who previously traded goods in markets in North Korea have higher trust in most people. By contrast, the experience of trading in markets did not affect trust in other North Korean refugees, suggesting little evidence of in-group favoritism. Our main result is robust when we apply the instrument variable approach. This finding suggests the possibility that increased marketization in North Korea leads to a weakened control of the authorities over the North Korean society.