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Employee Involvement and Pay at U.S. and Canadian Auto Suppliers

  • Helper, Susan
  • Levine, David I.
  • Bendoly, Elliott

Using both survey data and field research, we investigate the effects of employee involvement practices on outcomes for blue-collar workers in the auto supply industry. wages by 3-5%. The causal mechanism linking involvement and wages appears most consistent with efficiency wage theories, and least consistent with compensating differences. With respect to employment stability, we find that employee involvement has a knife-edge character. Plants with intensive programs have larger employment gains, but are also slightly more likely to go out of business. These results are consistent with employee involvement raising quality and productivity, but also increasing fixed costs for liquidity-constrained firms.

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Paper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt8t51741b.

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Date of creation: 08 Jun 2000
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Handle: RePEc:cdl:indrel:qt8t51741b
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Web page: http://www.escholarship.org/repec/iir_iirwps/

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  1. Bearse, Peter M & Bozdogan, Hamparsum & Schlottmann, Alan M, 1997. "Empirical Econometric Modelling of Food Consumption Using a New Informational Complexity Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(5), pages 563-86, Sept.-Oct.
  2. Lindbeck, Assar & Snower, Dennis J, 1996. "Reorganization of Firms and Labor-Market Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 315-21, May.
  3. S Black & L Lynch, 1997. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," CEP Discussion Papers dp0376, Centre for Economic Performance, LSE.
  4. Levine, David I. & Parkin, Richard J., 1994. "Work organization, employment security, and macroeconomic stability," Journal of Economic Behavior & Organization, Elsevier, vol. 24(3), pages 251-271, August.
  5. Lindbeck, Assar & Snower, Dennis J, 1986. "Wage Setting, Unemployment, and Insider-Outsider Relations," American Economic Review, American Economic Association, vol. 76(2), pages 235-39, May.
  6. Akerlof, George A, 1984. "Gift Exchange and Efficiency-Wage Theory: Four Views," American Economic Review, American Economic Association, vol. 74(2), pages 79-83, May.
  7. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
  8. Dow, Gregory K, 1993. "Why Capital Hires Labor: A Bargaining Perspective," American Economic Review, American Economic Association, vol. 83(1), pages 118-34, March.
  9. Susan Helper, 1997. "Complementarity and Cost Reduction: Evidence from the Auto Supply Industry," NBER Working Papers 6033, National Bureau of Economic Research, Inc.
  10. William T. Dickens, 1986. "Wages, Employment and the Threat of Collective Action by Workers," NBER Working Papers 1856, National Bureau of Economic Research, Inc.
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