THE WAGES OF TRUST

Rudi Wielers

Rationality and Society, 1997, vol. 9, issue 3, 351-371

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.

Keywords: employment relationships; labor markets; trust (search for similar items in EconPapers)
Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/104346397009003005 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:ratsoc:v:9:y:1997:i:3:p:351-371

DOI: 10.1177/104346397009003005

Access Statistics for this article

More articles in Rationality and Society
Bibliographic data for series maintained by SAGE Publications ().