Trustworthiness in the Financial Industry

79 Pages Posted: 17 Aug 2020 Last revised: 19 May 2022

See all articles by Andrej Gill

Andrej Gill

Johannes Gutenberg University Mainz

Matthias Heinz

University of Cologne - Department of Personnel Economics; Centre for Economic Policy Research (CEPR)

Heiner Schumacher

KU Leuven - Faculty of Business and Economics (FEB)

Matthias Sutter

Max Planck Institute for Research on Collective Goods

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Abstract

The financial industry has been struggling with widespread misconduct and public mistrust. Here we argue that the lack of trust into the financial industry may stem from the selection of subjects with little, if any, trustworthiness into the financial industry. We identify the social preferences of business and economics students, and follow up on their first job placements. We find that during college, students who want to start their career in the financial industry are substantially less trustworthy. Most importantly, actual job placements several years later confirm this association. The job market in the financial industry does not screen out less trustworthy subjects. If anything the opposite seems to be the case: Even among students who are highly motivated to work in finance after graduation, those who actually start their career in finance are significantly less trustworthy than those who work elsewhere.

Keywords: social preferences, selection, financial industry, trustworthiness, experiment

JEL Classification: C91, G20, M51

Suggested Citation

Gill, Andrej and Heinz, Matthias and Schumacher, Heiner and Sutter, Matthias, Trustworthiness in the Financial Industry. IZA Discussion Paper No. 13583, Available at SSRN: https://ssrn.com/abstract=3674304

Andrej Gill (Contact Author)

Johannes Gutenberg University Mainz ( email )

Saarstr. 21
Jakob Welder-Weg 4
Mainz, 55122
Germany

Matthias Heinz

University of Cologne - Department of Personnel Economics ( email )

Cologne, 50923
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Heiner Schumacher

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Matthias Sutter

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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