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Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes

Author

Listed:
  • Anja Decressin
  • Julia Lane
  • Kristin McCue
  • Martha Stinson

Abstract

What do firms gain by offering benefits? Economists have proposed two payoffs: (i) benefits may be a more cost-effective form of compensation than wages for employees facing high marginal tax rates, and (ii) benefits may attract a more stable, skilled workforce. Both should improve firm outcomes, but we have little evidence on this matter. This paper exploits a rich new dataset to examine how firm productivity and survival are related to benefit offering, and finds that benefit-offering firms have higher productivity and higher survival rates. Differences in firm and workforce characteristics explain some but not all of the differences in outcomes.

Suggested Citation

  • Anja Decressin & Julia Lane & Kristin McCue & Martha Stinson, 2005. "Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes," Longitudinal Employer-Household Dynamics Technical Papers 2005-01, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:tpaper:2005-01
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    File URL: https://www2.census.gov/ces/tp/tp-2005-01.pdf
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    References listed on IDEAS

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    2. Rosemary Hyson & Alice Zawacki, 2008. "Health-Related Research Using Confidential U.S. Census Bureau Data," Working Papers 08-21, Center for Economic Studies, U.S. Census Bureau.
    3. Park, Timothy A., 2008. "Evaluating Labor Productivity in Food Retailing," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), pages 1-13.
    4. Juurikkala, Tuuli & Lazareva, Olga, 2006. "Non-wage benefits, costs turnover, and labor attachment: evidence from Russian firms," BOFIT Discussion Papers 4/2006, Bank of Finland Institute for Emerging Economies (BOFIT).
    5. Tuuli Juurikkala & Olga Lazareva, 2006. "Non-wage benefits, costs of turnover, and labor attachment: evidence from Russian firms," Working Papers w0062, Center for Economic and Financial Research (CEFIR).
    6. Tuuli Juurikkala & Olga Lazareva, 2012. "Non‐wage benefits, costs of turnover and labour attachment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(1), pages 113-136, January.
    7. Holland, Sara B., 2017. "Firm investment in human health capital," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 374-390.

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