Profit-sharing and employment variability: Microeconomic evidence on the Weitzman theory
AbstractThis study tests an important implication of Weitzman's profit-sharing theory-the prediction that profit-sharing firms will have more stable employment than fixed-wage firms-using panel data on 2,976 publicly traded companies for the years 1971-85. Profit-sharing manufacturing firms are found to have had smaller employment decreases than other manufacturing firms during business downturns: when the unemployment rate increased by one point, manufacturing firms in which all employees participated in a profit-sharing pension plan had a 2.0% decrease in employment, compared to a 3.1% decrease for non-profit-sharing manufacturing firms. No significant differences in employment stability were found, however, between profit-sharing and non-profit-sharing firms in the non-manufacturing sector. (Abstract courtesy JSTOR.)
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Bibliographic InfoArticle provided by ILR Review, Cornell University, ILR School in its journal ILR Review.
Volume (Year): 44 (1991)
Issue (Month): 3 (April)
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
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- Colin Green & J S Heywood, 2007. "Does profit sharing increase training by reducing turnover?," Working Papers 589032, Lancaster University Management School, Economics Department.
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- Cecilia Navarra, 2013. "How do worker cooperatives stabilize employment? The role of profit reinvestment into locked assets," Working Papers 1307, University of Namur, Department of Economics.
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