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Show Me the Money: Does Shared Capitalism Share the Wealth?

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  • Robert Buchele
  • Douglas Kruse
  • Loren Rodgers
  • Adria Scharf

Abstract

This paper examines the effect of a variety of employee ownership programs on employees' holdings of their employers' stock, their earnings and their wealth. Two major datasets are employed: the NBER Shared Capitalism Research Project employee survey dataset and the 2002 and 2006 national General Social Surveys (GSS). The GSS national survey shows that 29% of permanent, full-time employees with at least one year on the job own their employers' stock, compared to the unsurprisingly higher 87% of employees in the NBER "shared capitalist" firms. The employees in the national sample hold an average of $10,600 of employer stock, compared to $52,800 in the NBER sample. Employee owners in NBER companies with broad-based ownership structures fare better: those in majority-owned ESOPs hold on average $86,000 in company stock and those in broad-based stock option plans hold options worth an average of $283,000. We find no evidence -- either between datasets or between employee-owners and non-owners within datasets -- of substitution of company stock ownership for pay or benefits. Moreover, our analysis suggests that company stock ownership substantially raises total employee wealth, though it appears to have little effect on the overall distribution of wealth. These results suggest that employee ownership tends to raise both ownership stakes and economic resources of American workers across the economic spectrum.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14830.

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Date of creation: Apr 2009
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Publication status: published as Show Me the Money: Does Shared Capitalism Share the Wealth? , Robert Buchele, Douglas L. Kruse, Loren Rodgers, Adria Scharf. in Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options , Kruse, Freeman, and Blasi. 2010
Handle: RePEc:nbr:nberwo:14830

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References

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  1. Pencavel, John & Pistaferri, Luigi & Schivardi, Fabiano, 2006. "Wages, Employment, and Capital in Capitalist and Worker-Owned Firms," IZA Discussion Papers 2188, Institute for the Study of Labor (IZA).
  2. Douglas L. Kruse & Joseph R. Blasi & Rhokeun Park, 2008. "Shared Capitalism in the U.S. Economy? Prevalence, Characteristics, and Employee Views of Financial Participation in Enterprises," NBER Working Papers 14225, National Bureau of Economic Research, Inc.
  3. repec:nbr:nberwo:14233 is not listed on IDEAS
  4. Richard Freeman & Douglas Kruse & Joseph Blasi, 2008. "Worker Responses To Shirking Under Shared Capitalism," NBER Working Papers 14227, National Bureau of Economic Research, Inc.
  5. Erika Harden & Douglas L. Kruse & Joseph R. Blasi, 2008. "Who Has a Better Idea? Innovation, Shared Capitalism, and HR Policies," NBER Working Papers 14234, National Bureau of Economic Research, Inc.
  6. Joseph R. Blasi & Douglas L. Kruse & Harry M. Markowitz, 2008. "Risk and Lack of Diversification under Employee Ownership and Shared Capitalism," NBER Working Papers 14229, National Bureau of Economic Research, Inc.
  7. Joseph Blasi & Michael Conte & Douglas Kruse, 1996. "Employee stock ownership and corporate performance among public companies," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(1), pages 60-79, October.
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Cited by:
  1. Artz, Georgeanne M. & Kim, Younjun, 2011. "Business Ownership by Workers: Are Worker Cooperatives a Viable Option?," Staff General Research Papers 34575, Iowa State University, Department of Economics.

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