Reciprocal Loyalty and Union Mediation

Abstract

This study investigates the concept of loyalty in the employment relationship using a stated preference approach and a dataset obtained through purpose-built questionnaires. Reciprocal loyalty is defined as a gift exchange. Workers' good performance is rewarded by the employer by the provision of a job with a low likelihood of job loss. The study shows that such reciprocal employer-employee loyalty is highly rated by the workers as a desirable job attribute. Loyalty in the employer-employee relationship is differently valued by unionized and nonunionized workers. Overall, the evidence suggests that unionized workers are more receptive to arrangements involving reciprocal loyalty. This may be an outcome of adaptation to internalized norms of union behavior.