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Profit-Sharing and Wages: An Empirical Analysis Using French Data between 2000 and 2007

Author

Listed:
  • Noélie Delahaie

    (IRES - Institut de recherches économiques et sociales)

  • Richard Duhautois

    (CEET - Centre d'études de l'emploi et du travail - Cnam - Conservatoire National des Arts et Métiers [Cnam] - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé, LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - Cnam - Conservatoire National des Arts et Métiers [Cnam])

Abstract

Economic theory presents different arguments about how profit‐sharing may affect wages. First, profit‐sharing may substitute for the base wage. Second, profit‐sharing can be interpreted as an ‘efficiency wage’ that adds to the base wage and increases total compensation. The existing empirical literature has not determined which of these arguments is valid. This article attempts to address this issue for France between 2000 and 2007. Based on a difference‐in‐differences selection model, we show that bonuses in firms adopting profit‐sharing are too small to conclude whether it substitutes for or complements the base wage. While base wage levels are generally higher among profit‐sharing firms, changes in the base wage over this period are lower among firms that have had profit‐sharing for a number of years.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Noélie Delahaie & Richard Duhautois, 2019. "Profit-Sharing and Wages: An Empirical Analysis Using French Data between 2000 and 2007," Post-Print hal-02932147, HAL.
  • Handle: RePEc:hal:journl:hal-02932147
    DOI: 10.1111/bjir.12295
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    Cited by:

    1. Vladimir Pecheu, 2021. "Profit Sharing as a Bargaining Weapon Against Unions," Working Papers halshs-03247551, HAL.
    2. Mirella Damiani & Fabrizio Pompei & Andrea Ricci, 2023. "Tax breaks for incentive pay, productivity and wages: Evidence from a reform in Italy," British Journal of Industrial Relations, London School of Economics, vol. 61(1), pages 188-213, March.
    3. Marco A. Barrenechea-Mendez & Sara Martinez-de-Morentin, 2021. "Profit Sharing, Interconnected Autonomous Teams, and Employee Productivity," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 2107, Departamento de Economía - Universidad Pública de Navarra.
    4. Emmanuel Petrakis & Panagiotis Skartados, 2021. "Strategic profit‐sharing in a unionized differentiated goods oligopoly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(2), pages 582-622, May.
    5. Vladimir Pecheu, 2021. "Profit Sharing as a Bargaining Weapon Against Unions," AMSE Working Papers 2135, Aix-Marseille School of Economics, France.

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