Social trust, the belief that most other people can be trusted, is an important moral resource that promotes health, longevity, better working democracies, and economic development. Recent longitudinal research from the United Kingdom and the United States shows that job loss leads, even after re-employment, to a lasting decrease in people’s social trust. Very little is known, however, about the mechanisms that account for this ‘scarring effect’ of job displacement on social trust. Is it the increasing labor market insecurity in the period preceding unemployment, the actual job loss, or the period after job loss that evoke a decrease in social trust? Nor do we know whether and how unemployment leaves scars on social trust in contexts other than those Protestant, liberal Anglo-Saxon countries. Lastly, previous research failed to address whether it is only people’s own job loss that matters, or whether even other family members’ unemployment experiences contribute to shape people’s trust in others. Using individual panel data (Gender and Generations Program, Swiss Household Panel Study, ESS CRONOS) and comparative longitudinal data from Europe (European Values Study, European Social Survey), this research project contributes to fill this research gap. The results will provide social policy makers and scholars with a thorough understanding about the interplay between welfare states, labor market institutions, unemployment, the Protestant work ethic, and social trust.