Profit sharing, employment stability, and wage growth
AbstractThe authors conjecture that profit-sharing reduces turnover and thus increases expected returns to firm-specific human capital investments, so that the optimal levels of skill acquisition and investment in firm-specific skills rise and ultimately increase productivity. Empirical evidence from NLSY data on white men in nonunion jobs between 1988 and 1994 supports this hypothesis. Employees participating in profit-sharing plans were less likely than non-participants to separate from their jobs. They also received training more frequently and for longer durations. Finally, the authors show that profit-sharing was related to higher wage growth, indicating a faster rate of skill accumulation. (Author's abstract.)
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Bibliographic InfoArticle provided by ILR Review, Cornell University, ILR School in its journal ILR Review.
Volume (Year): 54 (2001)
Issue (Month): 3 (April)
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
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- Daniel Parent, 2002.
"Incentives? The Effect of Profit Sharing Plans Offered by Previous Employers on Current Wages,"
CIRANO Working Papers
- Parent, Daniel, 2004. "Incentives? The effect of profit sharing plans offered by previous employers on current wages," Economics Letters, Elsevier, vol. 83(1), pages 37-42, April.
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- Douglas Kruse & Richard Freeman & Joseph Blasi, 2008.
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NBER Working Papers
14233, National Bureau of Economic Research, Inc.
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- Green, Colin P. & Heywood, John S., 2010.
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- Colin Green & J S Heywood, 2008. "Profit Sharing and the Quality of Relations with the Boss," Working Papers 596078, Lancaster University Management School, Economics Department.
- Heywood, John S. & Jirjahn, Uwe, 2009. "Profit sharing and firm size: The role of team production," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 246-258, August.
- Kauhanen, Antti & Piekkola, Hannu, 2002. "Profit Sharing in Finland: Earnings and Productivity Effects," Discussion Papers 817, The Research Institute of the Finnish Economy.
- Thomas Cornelissen & John S. Heywood & Uwe Jirjahn, 2010. "Profit Sharing and Reciprocity: Theory and Survey Evidence," SOEPpapers on Multidisciplinary Panel Data Research 292, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Morissette, Rene Rosa, Julio, 2003. "Alternative Work Practices and Quit Rates: Methodological Issues and Empirical Evidence for Canada," Analytical Studies Branch Research Paper Series 2003199e, Statistics Canada, Analytical Studies Branch.
- Kauhanen, Antti & Piekkola, Hannu, 2002. "Rent Sharing as Part of Incentive Payments and Recruitment," Discussion Papers 793, The Research Institute of the Finnish Economy.
- Göddeke, Anna & Haucap, Justus & Herr, Annika & Wey, Christian, 2011. "Stabilität und Wandel von Arbeitsmarktinstitutionen aus wettbewerbsökonomischer Sicht," DICE Ordnungspolitische Perspektiven 10, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
- Colin Green & J S Heywood, 2007. "Does profit sharing increase training by reducing turnover?," Working Papers 589032, Lancaster University Management School, Economics Department.
- Leila Baghdadi & Rihab Bellakhal & Marc-Arthur Diaye, 2012. "Do French firms use financial participation to transfer more risk to their workers?," Documents de recherche 12-10, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
- Douglas L. Kruse & Joseph R. Blasi & Richard B. Freeman, 2012. "Does Linking Worker Pay to Firm Performance Help the Best Firms Do Even Better?," NBER Working Papers 17745, National Bureau of Economic Research, Inc.
- Pablo González, 2002. "Profit Sharing Reconsidered: Efficiency Wages and Renegotiation Costs," Documentos de Trabajo 151, Centro de Economía Aplicada, Universidad de Chile.
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