A Neo-Kaleckian Model of Profit Sharing, Capacity Utilization and Economic Growth
This paper sets forth a Neo-Kaleckian model of capacity utilization and growth with distribution featuring a profit-sharing arrangement. While a given proportion of firms compensate workers with only a base wage, the remaining proportion do so with a base wage and a share of profits. Consistent with the empirical evidence, workers hired by profit-sharing firms have a higher productivity than their counterparts in base-wage firms. While a higher profit-sharing coefficient raises capacity utilization and growth irrespective of the distribution of compensation strategies across firms, a higher frequency of profit-sharing firms does likewise only if the profit-sharing coefficient is sufficiently high.
|Date of creation:||11 Nov 2011|
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- Arindrajit Dube & Richard B. Freeman, 2010.
"Complementarity of Shared Compensation and Decision-Making Systems: Evidence from the American Labor Market,"
in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 167-199
National Bureau of Economic Research, Inc.
- Arindrajit Dube & Richard Freeman, 2008. "Complementarity of Shared Compensation and Decision-Making Systems: Evidence from the American Labor Market," NBER Working Papers 14272, National Bureau of Economic Research, Inc.
- Mark Setterfield (ed.), 2010. "Handbook of Alternative Theories of Economic Growth," Books, Edward Elgar Publishing, number 12814.
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- Cahuc, Pierre & Dormont, Brigitte, 1997. "Profit-sharing: Does it increase productivity and employment? A theoretical model and empirical evidence on French micro data," Labour Economics, Elsevier, vol. 4(3), pages 293-319, September.
- Cahuc, P. & Dormont, B., 1992. "Profit-Sharing: Does It Increase Productivity and Employment? A Theoretical Model and Empirical Evidence of French Micro Data," Papiers d'Economie MathÃ©matique et Applications 92.45, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
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