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Reciprocal Loyalty and Union Mediation


  • Department of Economics, University of Aberdeen Business School, Aberdeen, UK. Centre for the European Labour Market Research, Aberdeen, UK. The authors are grateful for the invaluable contribution of Professor Bernard Van Praag and Dr. Ada Ferrer-i-Carbonell during the design stage of the questionnaire. The helpful comments of Keith Hancock, Keith Bender, Kohei Kawamura, Tim Barmby, Ed Hopkins, Kostas Pouliakas, two anonymous referees of this journal, and the seminar participants at the University of Aberdeen, the 11th IZA Summer School in Labor Economics, SGPE 2008, IAREP/SABE 2008, IMEBE 2009, IMAEF 2009, ISNIE 2009, and the 21st Australian Labour Market Research Workshop 2010 are gratefully acknowledged. This study is undertaken as part of the wider agenda of the EPICURUS project (contract number: HPSE-CT-2002-00143) and the HEALTHatWORK (contract number: 200716) project supported by the European Commission.


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.