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New evidence on wages and employment in worker cooperatives compared with capitalist firms

  • Burdín, Gabriel
  • Dean, Andrés

This article presents new econometric evidence on the comparative behavior of worker cooperatives and capitalist firms, highlighting the differences in wages and employment responses. We use a comprehensive panel data set that covers the entire population of cooperatives and their capitalist counterparts registered in the social security records in Uruguay from April 1996 to December 2005. We analyze the data to study the employment and wage decisions in both types of enterprises, the results of which suggests that their adjustment mechanisms to idiosyncratic price changes and macroeconomic shocks may differ greatly. The data set also allows us to estimate wage and employment variations for members and non-members of cooperatives separately, and provides an empirical test for the so-called degeneration hypothesis. Our findings are broadly consistent with previous studies for Italian cooperatives and plywood cooperatives in the United States. As studies of this kind are so few, our research provides a significant contribution to the empirical literature on labor managed firms. Moreover, comparing worker cooperatives and capitalist firms offers an exceptional opportunity to determine how control by workers may lead to different organizational behavior.

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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 37 (2009)
Issue (Month): 4 (December)
Pages: 517-533

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Handle: RePEc:eee:jcecon:v:37:y:2009:i:4:p:517-533
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

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  1. Samuel Bowles & Herbert Gintis, 2002. "Social Capital and Community Governance," Economic Journal, Royal Economic Society, vol. 112(483), pages 419-436, November.
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  8. Gabriel Burdín & Andrés Dean, 2008. "Los objetivos de una empresa gestionada por sus trabajadores : un análisis sobre el caso uruguayo," Documentos de Trabajo (working papers) 08-10, Instituto de Economía - IECON.
  9. 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.
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