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Does profit sharing increase training by reducing turnover?

Author

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  • C Green
  • J S Heywood

Abstract

We test the theoretical prediction that profit sharing reduces worker separations and by doing so increases the incidence of training. Using individual level UK data, we confirm that profit sharing is a robust determinant of lower separation rates and of greater training incidence. Critically, we cannot confirm the predicted link between separations and training. Instead, the evidence supports alternative theories suggesting a direct link between profit sharing and training. Our results suggest that profit sharing changes employer-worker relations in a way that leads to greater formal and informal investment in worker skills but that this is independent of its influence on reducing separations.

Suggested Citation

  • C Green & J S Heywood, 2007. "Does profit sharing increase training by reducing turnover?," Working Papers 589032, Lancaster University Management School, Economics Department.
  • Handle: RePEc:lan:wpaper:589032
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    File URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/ProfitSharingTraining.pdf
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    References listed on IDEAS

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    Cited by:

    1. Green, Colin P. & Heywood, John S., 2010. "Profit sharing and the quality of relations with the boss," Labour Economics, Elsevier, vol. 17(5), pages 859-867, October.
    2. repec:lan:wpaper:3014 is not listed on IDEAS
    3. repec:lan:wpaper:2920 is not listed on IDEAS
    4. Hans Peter Grüner, 2009. "Kapitalbeteiligung von Mitarbeitern. Eine Bewertung der jüngsten Vorschläge," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(2), pages 175-188, May.
    5. repec:lan:wpaper:3169 is not listed on IDEAS

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    Keywords

    Profit shares; Performance pay; training; turnover;

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