“Do Trust and Trustworthiness Pay Off?”

 

Joel Slemrod and Peter Katuščák

 

Journal of Human Resources 40(3), 621-646 (2005).

 

 

(download paper)

 


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.


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