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Do Trust and Trustworthiness Pay Off?

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  • Joel Slemrod
  • Peter Katuák

Abstract

Are individuals who trust others better off than those who do not? Do trustworthy people prosper more than untrustworthy ones? We formulate and, using data from the World Values Survey, empirically evaluate predictions about the relationship between an individual’s income and his self-reported attitudes toward trust and trustworthiness, and predictions about how these relationships are mediated by the average level of trust and trustworthiness in the country. On average, exhibiting trust has a positive, while exhibiting trustworthiness has a negative impact on income. More strikingly, the payoff to being trustworthy increases with the average level of trust in a given country.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 40 (2005)
Issue (Month): 3 ()
Pages:

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Handle: RePEc:uwp:jhriss:v:40:y:2005:i:2:p621-646

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Web page: http://jhr.uwpress.org/

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References

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Cited by:
  1. Helmut Rainer & Thomas Siedler, 2006. "Does Democracy Foster Trust?," Discussion Papers of DIW Berlin 609, DIW Berlin, German Institute for Economic Research.
  2. Abigail Barr & Pieter Serneels, 2004. "Wages and Reciprocity in the Workplace," Economics Series Working Papers WPS/2004-18, University of Oxford, Department of Economics.
  3. Johansson-Stenman, Olof, 2006. "Who Are the Trustworthy, We Think?," Working Papers in Economics 222, University of Gothenburg, Department of Economics.
  4. Heineck, Guido & Süssmuth, Bernd, 2012. "A different look at Lenin's legacy: Social capital and risk taking in the two Germanies," Working Papers 118, University of Leipzig, Faculty of Economics and Management Science.
  5. Hong, Kessely & Bohnet, Iris, 2007. "Status and distrust: The relevance of inequality and betrayal aversion," Journal of Economic Psychology, Elsevier, vol. 28(2), pages 197-213, April.
  6. Peter Katuscak & Joel Slemrod, 2006. "Trust and Trustworthiness in an Economy with Heterogeneous Individuals," CERGE-EI Working Papers wp305, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  7. Breuer, Janice Boucher & McDermott, John, 2009. "Trustworthiness and economic performance," MPRA Paper 16777, University Library of Munich, Germany.
  8. Ashraf, Nava & Bohnet, Iris & Piankov, Nikita, 2003. "Is Trust a Bad Investment?," Working Paper Series rwp03-047, Harvard University, John F. Kennedy School of Government.
  9. Helmut Rainer & Thomas Siedler, 2006. "Does Democracy Foster Trust? Evidence from the German Reunification," Economics Discussion Papers 613, University of Essex, Department of Economics.

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