Revisiting the objectives of worker-managed firms: An empirical assessment
This paper provides new evidence on the objectives pursued by worker-managed firms (WMFs). The basic neoclassical model assumes that WMFs maximizes net income per member instead of total profits (Ward, 1958). Even though it has been largely criticized, the Ward model has dominated the self-management literature. Alternative models suggest that WMFs are not only concerned about income per worker but also about the level of employment. However, the empirical content of these competing theoretical models has been rarely analyzed. This paper contributes to fill this gap by estimating the parameters of a generic welfare function, following the methodology proposed by Craig and Pencavel (1993). These parameters determine the relative importance that a WMF places on income per worker vis-a-vis the level of employment. Estimates are based on a long micro-panel of Uruguayan firms covering the entire population of Uruguayan worker-managed firm and conventional firms in 31 3-digit sectors over the period April 1996-December 2005. Following a strictly neoclassical framework, but simply allowing a more general specification of the WMF goals, we show that the assumption of the basic neoclassical model of the WMF is misleading. Our results support the view that WMFs are concerned with both employment and income per worker.
Volume (Year): 36 (2012)
Issue (Month): 1 ()
|Contact details of provider:|| Postal: |
Phone: +49-(0)941-943 54 10
Fax: +49-(0)941-943 54 27
Web page: http://www.elsevier.com/locate/inca/621171
More information through EDIRC
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.:
- Estrin, Saul, 1982. "Long-run supply responses under self-management," Journal of Comparative Economics, Elsevier, vol. 6(4), pages 363-378, December.
- John Pencavel & Luigi Pistaferri & Fabiano Schivardi, 2006.
"Wages, employment, and capital in capitalist and worker-owned firms,"
Industrial and Labor Relations Review,
ILR Review, Cornell University, ILR School, vol. 60(1), pages 23-44, October.
- John Pencavel & Luigi Pistaferri & Fabiano Schivardi, 2006. "Wages, Employment, and Capital in Capitalist and Worker-Owned Firms," ILR Review, Cornell University, ILR School, vol. 60(1), pages 23-44, October.
- 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).
- Jones, Derek C & Svejnar, Jan, 1985.
"Participation, Profit Sharing, Worker Ownership and Efficiency in Italian Producer Cooperative,"
London School of Economics and Political Science, vol. 52(208), pages 449-65, November.
- Jones, D.C. & Svejnar, J., 1984. "Participation, profit sharing, worker ownership and efficieny in Italian producer cooperatives," CORE Discussion Papers 1984019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- JONES, Derek C. & SVEJNAR, Jan, . "Participation, profit sharing, worker ownership and efficiency in Italian producer cooperatives," CORE Discussion Papers RP 681, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
- Gregory Dow, 1996. "Replicating Walrasian equilibria using markets for membership in labor-managed firms," Review of Economic Design, Springer, vol. 2(1), pages 147-162, December.
- Estrin, Saul, 1991. "Some reflections on self-management, social choice, and reform in eastern europe," Journal of Comparative Economics, Elsevier, vol. 15(2), pages 349-366, June.
- Ben-Ner, A. & Montias, J.M. & Neuberger, E., 1993.
"Basic Issues in Organizations: A Comparative Perspective,"
93-01, Minnesota - Industrial Relations Center.
- Ben-Ner Avner & Montias John Michael & Neuberger Egon, 1993. "Basic Issues in Organizations: A Comparative Perspective," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 207-242, June.
- Saul Estrin & Milica Uvalic, 2008. "From Illyria towards Capitalism: Did Labour-Management Theory Teach Us Anything about Yugoslavia and Transition in Its Successor States?," Comparative Economic Studies, Palgrave Macmillan, vol. 50(4), pages 663-696, December.
- Steinherr, A. & Thisse, J. -F., 1979. "Are labor-managers really perverse?," Economics Letters, Elsevier, vol. 2(2), pages 137-142.
- Craig, Ben & Pencavel, John, 1992. "The Behavior of Worker Cooperatives: The Plywood Companies of the Pacific Northwest," American Economic Review, American Economic Association, vol. 82(5), pages 1083-105, December.
- Adriana Cassoni, 2000. "Trade unions in Uruguay: some historical features explaining their economic role," Documentos de Trabajo (working papers) 0400, Department of Economics - dECON.
- Kahana, Nava & Nitzan, Shmuel, 1989. "More on alternative objectives of labor-managed firms," Journal of Comparative Economics, Elsevier, vol. 13(4), pages 527-538, December.
- MaCurdy, Thomas E & Pencavel, John H, 1986. "Testing between Competing Models of Wage and Employment Determination in Unionized Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S3-S39, June.
- Manuel Arellano & Olympia Bover, 1990. "La econometría de datos de panel," Investigaciones Economicas, Fundación SEPI, vol. 14(1), pages 3-45, January.
- Dertouzos, James N & Pencavel, John H, 1981. "Wage and Employment Determination under Trade Unionism: The International Typographical Union," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1162-81, December.
- Berman, Katrina V. & Berman, Matthew D., 1989. "An empirical test of the theory of the labor-managed firm," Journal of Comparative Economics, Elsevier, vol. 13(2), pages 281-300, June.
- Dow, Gregory K., 1986. "Control rights, competitive markets, and the labor management debate," Journal of Comparative Economics, Elsevier, vol. 10(1), pages 48-61, March.
- Miyazaki, Hajime, 1984. "On Success and Dissolution of the Labor-Managed Firm in the Capitalist Economy," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 909-31, October.
- repec:tpr:qjecon:v:99:y:1984:i:2:p:215-31 is not listed on IDEAS
- Craig Ben & Pencavel John, 1993. "The Objectives of Worker Cooperatives," Journal of Comparative Economics, Elsevier, vol. 17(2), pages 288-308, June.
- Prasnikar, Janez, et al, 1994. "Behavior of Participatory Firms in Yugoslavia: Lessons for Transforming Economies," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 728-41, November.
- Jones, Derek C & Backus, David K, 1977. "British Producer Cooperatives in the Footwear Industry: An Empirical Evaluation of the Theory of Financing," Economic Journal, Royal Economic Society, vol. 87(347), pages 488-510, September.
- Bonin, John P., 1981. "The theory of the labor-managed firm from the membership's perspective with implications for marshallian industry supply," Journal of Comparative Economics, Elsevier, vol. 5(4), pages 337-351, December.
- John H. Pencavel, 1982.
"The Trade-Off between Wages and Employment in Trade Union Objectives,"
NBER Working Papers
0870, National Bureau of Economic Research, Inc.
- Rossini, Gianpaolo, 2005. "Outsourcing with labor management," Economic Systems, Elsevier, vol. 29(4), pages 455-466, December.
- Burdín, Gabriel & Dean, Andrés, 2009. "New evidence on wages and employment in worker cooperatives compared with capitalist firms," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 517-533, December.
- Will Bartlett & Saul Estrin & John Cable & Stephen Smith, 1992. "Labor-managed cooperatives and private firms in north central Italy: An empirical comparison," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 103-118, October.
When requesting a correction, please mention this item's handle: RePEc:eee:ecosys:v:36:y:2012:i:1:p:158-171. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.