When Workers Share in Profits: Effort and Responses to Shirking
AbstractThis paper summarizes new evidence from the National Bureau of Economic Research “Shared Capitalism” Project on the extent to which workers’ earnings depend on the performance of their firm or work group in the US and advanced Europe and on the impact of sharing arrangements on economic behavior. The evidence shows that: 1) a large and growing proportion of workers are covered by shared capitalism through worker profit-sharing, bonuses, or worker ownership of shares; 2) outcomes for workers and firms are higher under shared capitalism than under other work and pay arrangements; and 3) that worker co-monitoring helps overcome the free rider problem that arises when part of pay depends on the productivity and effort of all workers.
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Bibliographic InfoArticle provided by SIPI Spa in its journal Rivista di Politica Economica.
Volume (Year): 97 (2007)
Issue (Month): 6 (November-December)
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Other versions of this item:
- Richard B. Freeman, 2008. "When Workers Share in Profits: Effort and Responses to Shirking," 'Angelo Costa' Lectures Serie, SIPI Spa, issue Lect. IX.
- Richard Freeman, 2008. "When Workers Share in Profits: Effort and Responses to Shirking," CEP Discussion Papers dp0882, Centre for Economic Performance, LSE.
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
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