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Profit Sharing and Gainsharing: A Review of Theory, Incidence, and Effects

  • Derek C. Jones

    (The Jerome Levy Economics Institute)

  • Takao Kato

    (The Jerome Levy Economics Institute)

  • Jeffrey Pliskin

    (The Jerome Levy Economics Institute)

The slowdown in productivity growth since the 1970s has led to increased interest in alternative compensation schemes—such as profit sharing and gainsharing—that might raise worker productivity and reduce turnover. In this working paper, Jones, Kato, and Pliskin summarize the rise in popularity of profit sharing (PS) and gainsharing (GS) plans; review existing theoretical and empirical work on PS and GS; and highlight findings that relate the effectiveness of such programs at raising productivity and enhancing employment stability. They also note that some existing studies contain some econometric problems relating to plan and model variables; there are measurement problems as well. Their paper primarily focuses on PS plans.

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File URL: http://128.118.178.162/eps/mac/papers/9903/9903010.pdf
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Paper provided by EconWPA in its series Macroeconomics with number 9903010.

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Length: 32 pages
Date of creation: 11 Mar 1999
Date of revision:
Handle: RePEc:wpa:wuwpma:9903010
Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 32; figures: included
Contact details of provider: Web page: http://128.118.178.162

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  1. Kandel, Eugene & Lazear, Edward P, 1992. "Peer Pressure and Partnerships," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 801-17, August.
  2. Richard B. Freeman & Martin L. Weitzman, 1986. "Bonuses and Employment in Japan," NBER Working Papers 1878, National Bureau of Economic Research, Inc.
  3. Edward P. Lazear, 1991. "Labor Economics and the Psychology of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 89-110, Spring.
  4. Roger T. Kaufman, 1992. "The effects of IMPROSHARE on productivity," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 45(2), pages 311-322, January.
  5. Armen A. Alchian & Harold Demsetz, 1971. "Production, Information Costs and Economic Organizations," UCLA Economics Working Papers 10A, UCLA Department of Economics.
  6. Derek C. Jones & Takao Kato, 1993. "The Scope, Nature, and Effects of Employee Stock Ownership Plans in Japan," ILR Review, Cornell University, ILR School, vol. 46(2), pages 352-367, January.
  7. Douglas L. Kruse, 1991. "Profit-sharing and employment variability: Microeconomic evidence on the Weitzman theory," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(3), pages 437-453, April.
  8. Kumbhakar, Subal C. & Dunbar, Amy E., 1993. "The elusive ESOP--productivity link : evidence from U.S. firm-level data," Journal of Public Economics, Elsevier, vol. 52(2), pages 273-283, September.
  9. Blanchflower, David G & Oswald, Andrew J, 1987. "Profit Sharing--Can It Work?," Oxford Economic Papers, Oxford University Press, vol. 39(1), pages 1-19, March.
  10. S Estrin & D Jones, 1992. "The Determinants of Investment in Employee Owned Firms: Evidence from France," CEP Discussion Papers dp0087, Centre for Economic Performance, LSE.
  11. James R. Chelius & Robert S. Smith, 1990. "Profit sharing and employment stability," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 43(3), pages 256-273, February.
  12. FitzRoy, Felix R & Kraft, Kornelius, 1986. "Profitability and Profit-Sharing," Journal of Industrial Economics, Wiley Blackwell, vol. 35(2), pages 113-30, December.
  13. Bell, Linda A & Neumark, David, 1993. "Lump-Sum Payments and Profit-Sharing Plans in the Union Sector of the United States Economy," Economic Journal, Royal Economic Society, vol. 103(418), pages 602-19, May.
  14. Jensen, Michael C & Meckling, William H, 1979. "Rights and Production Functions: An Application to Labor-managed Firms and Codetermination," The Journal of Business, University of Chicago Press, vol. 52(4), pages 469-506, October.
  15. Brunello, G., 1989. "Bonuses, Wages And Performance In Japan: Evidence From Micro Data," Papers 359, London School of Economics - Centre for Labour Economics.
  16. Takatoshi Ito, 1991. "The Japanese Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262090295, June.
  17. Tracy, Joseph, 1986. "Unions and the share economy," Journal of Comparative Economics, Elsevier, vol. 10(4), pages 433-437, December.
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