The Decline of Trust Across the U.S. Finance Industry

We provide evidence on the evolution of generalized trust among finance professionals using data from the General Social Survey over the period 1978-2016. Accounting for demographic, regional, and socioeconomic characteristics, we document a significant decline in the level of trust among finance professionals relative to the decline of trust in the U.S. population. This decline is unique to the finance industry and is particularly strong in the early years of the sample when finance professionals initially exhibited a higher level of trust than the average American. The decline occurs across all subsectors in finance and at all hierarchy levels.

Keywords: Finance industry, Generalized trust, Implicit incentives, Professional environment, Socialization

JEL Classification: G20, G21, G22, G24, L14, A14

Suggested Citation: Suggested Citation

Limbach, Peter and Rau, P. Raghavendra and Schürmann, Henrik, The Decline of Trust Across the U.S. Finance Industry (June 20, 2023). Journal of Economic Behavior and Organization, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3559047 or http://dx.doi.org/10.2139/ssrn.3559047