Social Preferences of Young Professionals and the Financial Industry

Trust is an important element of many financial transactions. Yet, the financial industry has been struggling with public mistrust. One explanation for this could be the selection of individuals who wish to work in and get job offers from the financial industry. In this paper, we examine the selection into the financial industry based on social preferences. We identify the social preferences of business and economics students, and, for more than six years, follow up on their early career choices and their job placement after graduation. Students eager to work in the financial industry behave in a substantially less trustworthy manner and show less willingness to cooperate than those with other career plans. The job market does not alleviate this selection. Those subjects who find their first permanent job in finance behave in significantly less trustworthy manner in a trust game than those working in other industries.

Automated summary

Trust is crucial in financial transactions, but the financial industry has been struggling with public mistrust. This study finds that individuals who aspire to work in the financial industry exhibit less trustworthy behavior and lower willingness to cooperate, compared to those with different career plans. Even after finding jobs in finance, individuals continue to display less trustworthiness in a trust game than those in other industries.