IDEAS home Printed from https://ideas.repec.org/a/sae/ratsoc/v9y1997i3p351-371.html
   My bibliography  Save this article

The Wages Of Trust

Author

Listed:
  • Rudi Wielers

Abstract

In this paper it is argued that the assumptions of the neoclassical and wage efficiency models do not adequately explain the governance structure of employment relationships. Trust may be a constituent element of at least some employment relationships, e.g. those of child minders. According to the tradition of research in social science, trust is established by gifts. It is argued that in employment relationships in which both employer and employee have a gain and damage potential, gifts will be used to establish a trust relationship. This argument helps to produce new hypotheses about wages and allocation in employment relationships. The model is elaborated for the employment relationships of child minders. It is shown that it is not only job and human capital characteristics that determine wages, but also the financial resources of the parents (or employers). In addition, more personal means of exchange are used to establish trust relationships. It is concluded that the trust argument helps to explain different governance structures in employment relationships.

Suggested Citation

  • Rudi Wielers, 1997. "The Wages Of Trust," Rationality and Society, , vol. 9(3), pages 351-371, August.
    • Handle: RePEc:sae:ratsoc:v:9:y:1997:i:3:p:351-371
    DOI: 10.1177/104346397009003005
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/104346397009003005
    Download Restriction: no
    File URL: https://libkey.io/10.1177/104346397009003005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Salop, Steven C, 1979. "A Model of the Natural Rate of Unemployment," American Economic Review, American Economic Association, vol. 69(1), pages 117-125, March.
    2. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(4), pages 543-569.
    3. Bowles, Samuel, 1985. "The Production Process in a Competitive Economy: Walrasian, Neo-Hobbesian, and Marxian Models," American Economic Review, American Economic Association, vol. 75(1), pages 16-36, March.
    4. Polachek,Solomon W. & Siebert,W. Stanley, 1993. "The Economics of Earnings," Cambridge Books, Cambridge University Press, number 9780521367288, January.
    5. Weiss, Andrew W, 1980. "Job Queues and Layoffs in Labor Markets with Flexible Wages," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 526-538, June.
    6. repec:eee:labchp:v:2:y:1986:i:c:p:1183-1217 is not listed on IDEAS
    7. Samuel Bowles & Herbert Gintis, 1993. "The Revenge of Homo Economicus: Contested Exchange and the Revival of Political Economy," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 83-102, Winter.
    8. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    9. Thurow, Lester, 1983. "Dangerous Currents: The State of Economics," OUP Catalogue, Oxford University Press, number 9780198771838.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John G. Sessions & Nikolaos Theodoropoulos, 2014. "Tenure, Wage Profiles and Monitoring," Research in Labor Economics, in: New Analyses of Worker Well-Being, volume 38, pages 105-162, Emerald Group Publishing Limited.
    2. Ourania Karakosta & Nikos Tsakiris, 2009. "Indirect Tax Reforms and Public Goods under Imperfect Competition," University of Cyprus Working Papers in Economics 5-2009, University of Cyprus Department of Economics.
    3. Yim, Hyejin & Katare, Bhagyashree & Cuffey, Joel, 2022. "Does Increasing Minimum Wage Impact Service Quality? Evidence from Restaurant Food Safety Inspections," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322411, Agricultural and Applied Economics Association.
    4. Veronique Genre & Karsten Kohn & Daphne Momferatou, 2011. "Understanding inter-industry wage structures in the euro area," Applied Economics, Taylor & Francis Journals, vol. 43(11), pages 1299-1313.
    5. Bai, Peiwen & Cheng, Wenli, 2020. "Relative earnings and firm performance: Evidence from publicly-listed firms in China, 2005–2012," International Review of Economics & Finance, Elsevier, vol. 66(C), pages 279-290.
    6. Campbell, Carl M., 2014. "The formation of wage expectations in the effort and quit decisions of workers," Economic Modelling, Elsevier, vol. 42(C), pages 313-322.
    7. Lin, Chung-cheng & Chang, Juin-jen & Lai, Ching-chong, 2002. "Profit sharing as a worker discipline device," Economic Modelling, Elsevier, vol. 19(5), pages 815-828, November.
    8. Corneo, Giacomo, 2013. "Die relative Bezahlung der Hochqualifizierten in Staat und Privatwirtschaft: Deutschland, 1977-2011," Discussion Papers 2013/19, Free University Berlin, School of Business & Economics.
    9. Canegallo, Claudia, 1999. "Funzionamento del mercato del lavoro in presenza di informazione asimmetrica. Una rassegna della letteratura," POLIS Working Papers 8, Institute of Public Policy and Public Choice - POLIS.
    10. Herbold, Daniel & Schumacher, Heiner, 2020. "The agency costs of on-the-job search," Games and Economic Behavior, Elsevier, vol. 121(C), pages 435-452.
    11. John G. Sessions & John D. Skåtun, 2017. "Performance-Related Pay, Efficiency Wages and the Shape of the Tenure-Earnings Profile," Manchester School, University of Manchester, vol. 85(3), pages 295-319, June.
    12. Chung‐Cheng Lin & Ching‐Chong Lai, 1998. "Efficiency Wages, Partial Wage Rigidity, and Money Nonneutrality," Southern Economic Journal, John Wiley & Sons, vol. 65(2), pages 331-340, October.
    13. Zhang, Xuelin & Morissette, Rene, 2001. "Which Firms Have High Job Vacancy Rates in Canada?," Analytical Studies Branch Research Paper Series 2001176e, Statistics Canada, Analytical Studies Branch.
    14. Carl Campbell, 1991. "Tests of efficiency wage theory and contract theory with disaggregated data from the U.S," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(1), pages 98-118, March.
    15. Manuel David Cruz, 2022. "Labor productivity, real wages, and employment: evidence from a panel of OECD economies over 1960-2019," Working Papers PKWP2203, Post Keynesian Economics Society (PKES).
    16. Campbell III, Carl M., 2010. "Deriving the wage-wage and price-price Phillips curves from a model with efficiency wages and imperfect information," Economics Letters, Elsevier, vol. 107(2), pages 242-245, May.
    17. Sonia R Bhalotra, 1998. "Investigating Rationality in Wage-Setting," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 10, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    18. Luis A. Gil-Alana & Marinko Skare, 2018. "Testing the great decoupling: a long memory approach," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(4), pages 801-820, November.
    19. Campbell III, Carl M., 2008. "An efficiency wage approach to reconciling the wage curve and the Phillips curve," Labour Economics, Elsevier, vol. 15(6), pages 1388-1415, December.
    20. Azad, Rohit, 2016. "Plurality in Teaching Macroeconomics," MPRA Paper 76340, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ratsoc:v:9:y:1997:i:3:p:351-371. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.