Do Trust and Trustworthiness Pay Off?

26 Pages Posted: 17 Jan 2005 Last revised: 9 Oct 2009

See all articles by Joel B. Slemrod

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Peter Katuscak

RWTH Aachen University - Chair for Economics (Microeconomics)

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Date Written: January 21, 2005

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 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.

Keywords: Trust, trustworthiness, social capital

Suggested Citation

Slemrod, Joel B. and Katuscak, Peter, Do Trust and Trustworthiness Pay Off? (January 21, 2005). Journal of Human Resources, Vol. 40, No. 3, pp. 621-646, 2005. Available at SSRN: https://ssrn.com/abstract=649846

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Room R5396
Ann Arbor, MI 48109-1234
United States
734-936-3914 (Phone)
734-763-4032 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Peter Katuscak (Contact Author)

RWTH Aachen University - Chair for Economics (Microeconomics) ( email )

Aachen, 52056
Germany

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