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Profit Sharing, Capital Formation and the NAIRU

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  • Jerger, Jurgen
  • Michaelis, Jochen

Abstract

This paper reconsiders the impact of different remuneration systems on aggregate employment. Contrary to common wisdom on this topic, the authors show that the switch from a fixed wage economy to a share economy results in lower aggregate unemployment. An additional innovation of this paper is the endogeneity of the capital stock decision of the firm, which enables them to assess and reject the common 'disincentive-to-invest' criticism of a share economy. Copyright 1999 by The editors of the Scandinavian Journal of Economics.

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  • Jerger, Jurgen & Michaelis, Jochen, 1999. " Profit Sharing, Capital Formation and the NAIRU," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(2), pages 257-275, June.
  • Handle: RePEc:bla:scandj:v:101:y:1999:i:2:p:257-75
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    Citations

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    Cited by:

    1. Erkki Koskela & Rune Stenbacka, 2002. "Equilibrium Unemployment and Credit Market Imperfections: The Critical Role of Labour Mobility," CESifo Working Paper Series 654, CESifo Group Munich.
    2. Goerke, Laszlo, 2013. "Profit sharing and relative consumption," Economics Letters, Elsevier, pages 167-169.
    3. Erkki Koskela & Rune Stenbacka, 2004. "Profit Sharing and Unemployment: An Approach with Bargaining and Efficiency-Wage Effects," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 477-477, September.
    4. Koskela, Erkki & Stenbacka, Rune, 2003. "Equilibrium unemployment under negotiated profit sharing," Research Discussion Papers 19/2003, Bank of Finland.
    5. Jerger, Jürgen & Michaelis, Jochen, 2011. "The fixed wage puzzle: Why profit sharing is so hard to implement," Economics Letters, Elsevier, pages 104-106.
    6. Knabe, Andreas, 2009. "Implementing endogenous inside options in Nash wage bargaining models," Mathematical Social Sciences, Elsevier, vol. 57(2), pages 161-176, March.
    7. Fetzer, Stefan & Moog, Stefan & Raffelhüschen, Bernd, 2003. "Die Nachhaltigkeit der gesetzlichen Kranken- und Pflegeversicherung: Diagnose und Therapie," Discussion Papers 106, Albert-Ludwigs-Universität Freiburg, Institut für Finanzwissenschaft.
    8. Berthold, Norbert & Stettes, Oliver, 2001. "Die Gewinnbeteiligung - Wundermittel im organisatorischen und strukturellen Wandel?," Discussion Paper Series 49, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    9. Balázs Reizer, 2015. "Do Firms Pay Bonuses to Protect Jobs?," CEU Working Papers 2015_6, Department of Economics, Central European University.
    10. Koskela, Erkki & Stenbacka, Rune, 2012. "The relationship between product market competition and unemployment with profit sharing," Labour Economics, Elsevier, vol. 19(3), pages 291-297.
    11. Chia-ying Liu & Juin-jen Chang, 2011. "Macroeconomic implications of a sharing compensation scheme in a model of endogenous growth," Journal of Economics, Springer, pages 57-75.
    12. Erkki Koskela & Rune Stenbacka, 2004. "Equilibrium unemployment under negotiated profit sharing," Labor and Demography 0404009, EconWPA.
    13. Balazs Reizer, 2016. "Do Firms Pay Bonuses to Protect Jobs?," IEHAS Discussion Papers 1612, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    14. Erkki Koskela & Rune Stenbacka, 2000. "Compensation and Bargaining with Entrpreneurship as the Outside Option," CESifo Working Paper Series 314, CESifo Group Munich.
    15. Erkki Koskela & Rune Stenbacka, 2001. "Equilibrium Unemployment with Credit and Labour Market Imperfections," CESifo Working Paper Series 419, CESifo Group Munich.
    16. Koskela, Erkki & Stenbacka, Rune, 2003. "Profit Sharing and Unemployment: An Approach with Bargaining and Efficiency Wage Economics," Discussion Papers 863, The Research Institute of the Finnish Economy.
    17. Ehrentraut, Oliver & Fetzer, Stefan, 2003. "Wiedervereinigung, Aufholprozess Ost und Nachhaltigkeit," Discussion Papers 104, Albert-Ludwigs-Universität Freiburg, Institut für Finanzwissenschaft.
    18. Erkki Koskela & Rune Stenbacka, 2000. "Capital Structure, Wage Bargaining and Employment," CESifo Working Paper Series 275, CESifo Group Munich.
    19. Koskela, Erkki & Stenbacka, Rune, 2003. "Equilibrium Unemployment Under Negotiated Profit Sharing," IZA Discussion Papers 840, Institute for the Study of Labor (IZA).
    20. Jan König & Erkki Koskela, 2011. "Does International Outsourcing Really Lower Workers’ Income?," Journal of Labor Research, Springer, vol. 32(1), pages 21-38, March.
    21. Koskela, Erkki & Stenbacka, Rune, 2004. "Profit Sharing, Credit Market Imperfections and Equilibrium Unemployment," IZA Discussion Papers 1020, Institute for the Study of Labor (IZA).

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