When Workers Share in Profits: Effort and Responses to Shirking
AbstractThis paper summarizes new evidence from the "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 European countries 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 workers pay depends on the productivity and effort of all workers.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0882.
Date of creation: Jul 2008
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Profit sharing; efficiency wages;
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 B. Freeman, 2007. "When Workers Share in Profits: Effort and Responses to Shirking," Rivista di Politica Economica, SIPI Spa, vol. 97(6), pages 9-36, November-.
- Richard B. Freeman, 2008. "When workers share in profits: effort and responses to shirking," LSE Research Online Documents on Economics 28499, London School of Economics and Political Science, LSE Library.
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-31 (All new papers)
- NEP-BEC-2008-08-31 (Business Economics)
- NEP-EEC-2008-08-31 (European Economics)
- NEP-LAB-2008-08-31 (Labour Economics)
- NEP-LTV-2008-08-31 (Unemployment, Inequality & Poverty)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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