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Profit Sharing and Gainsharing: A Review of Theory, Incidence, and Effects

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Author Info
Derek C. Jones (The Jerome Levy Economics Institute)
Takao Kato (The Jerome Levy Economics Institute)
Jeffrey Pliskin (The Jerome Levy Economics Institute)

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Abstract

The slowdown in productivity growth since the 1970s has led to increased interest in alternative compensation schemes—such as profit sharing and gainsharing—that might raise worker productivity and reduce turnover. In this working paper, Jones, Kato, and Pliskin summarize the rise in popularity of profit sharing (PS) and gainsharing (GS) plans; review existing theoretical and empirical work on PS and GS; and highlight findings that relate the effectiveness of such programs at raising productivity and enhancing employment stability. They also note that some existing studies contain some econometric problems relating to plan and model variables; there are measurement problems as well. Their paper primarily focuses on PS plans.

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Publisher Info
Paper provided by EconWPA in its series Macroeconomics with number 9903010.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 32 pages
Date of creation: 11 Mar 1999
Date of revision:
Handle: RePEc:wpa:wuwpma:9903010

Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 32; figures: included
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E - Macroeconomics and Monetary Economics

References listed on IDEAS
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.:

  1. Brunello, G., 1989. "Bonuses, Wages And Performance In Japan: Evidence From Micro Data," Papers 359, London School of Economics - Centre for Labour Economics.
  2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December. [Downloadable!] (restricted)
    Other versions:
  3. Jensen, Michael C & Meckling, William H, 1979. "Rights and Production Functions: An Application to Labor-managed Firms and Codetermination," Journal of Business, University of Chicago Press, vol. 52(4), pages 469-506, October. [Downloadable!] (restricted)
  4. Kumbhakar, Subal C. & Dunbar, Amy E., 1993. "The elusive ESOP--productivity link : evidence from U.S. firm-level data," Journal of Public Economics, Elsevier, vol. 52(2), pages 273-283, September. [Downloadable!] (restricted)
  5. James R. Chelius & Robert S. Smith, 1990. "Profit sharing and employment stability," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 43(3), pages 256-273, February.
  6. Blanchflower, David G & Oswald, Andrew J, 1987. "Profit Sharing--Can It Work?," Oxford Economic Papers, Oxford University Press, vol. 39(1), pages 1-19, March. [Downloadable!] (restricted)
  7. Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers 90-07, Rochester, Business - Managerial Economics Research Center.
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  8. Bell, Linda A & Neumark, David, 1993. "Lump-Sum Payments and Profit-Sharing Plans in the Union Sector of the United States Economy," Economic Journal, Royal Economic Society, vol. 103(418), pages 602-19, May. [Downloadable!] (restricted)
  9. FitzRoy, Felix R & Kraft, Kornelius, 1986. "Profitability and Profit-Sharing," Journal of Industrial Economics, Blackwell Publishing, vol. 35(2), pages 113-30, December. [Downloadable!] (restricted)
  10. Roger T. Kaufman, 1992. "The effects of IMPROSHARE on productivity," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 45(2), pages 311-322, January.
  11. Douglas L. Kruse, 1991. "Profit-sharing and employment variability: Microeconomic evidence on the Weitzman theory," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 44(3), pages 437-453, April.
  12. Derek C. Jones & Takao Kato, 1993. "The scope, nature, and effects of employee stock ownership plans in Japan," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(2), pages 352-367, January.
  13. Richard B. Freeman & Martin L. Weitzman, 1989. "Bonuses and Employment in Japan," NBER Working Papers 1878, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Lazear, Edward P, 1991. "Labor Economics and the Psychology of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 89-110, Spring. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Enisse Kharroubi, 2004. "Wages, risk sharing and economic fluctuations," DELTA Working Papers 2004-33, DELTA (Ecole normale supérieure). [Downloadable!]
  2. Takao Kato & Ju Lee & Kang-sung Lee & Jang-soo Ryu, 2005. "Employee participation and involvement in korea: evidence from a new survey and field research," International Economic Journal, Korean International Economic Association, vol. 19(2), pages 251-281, June. [Downloadable!] (restricted)
  3. Derek C. Jones & Panu Kalmi & Mikko Mäkinen, 2004. "The Determinants of Stock Option Compensation: Evidence from Finland," Discussion Papers 957, The Research Institute of the Finnish Economy. [Downloadable!]
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