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The impact of financial participation on workers' compensation

The impact of financial participation on workers' compensation We investigate the impact of financial participation (profit-sharing and share ownership) on workers' total compensation. Some workers' representatives have argued against the introduction of profit-sharing because they fear that profit-sharing would be a way for firms to reduce the marginal cost of hiring workers, while at the same time transferring some of the risk of variable profits from firms to workers. We find that workers in plants which operate financial participation schemes earn significantly more: 25% in the case of profit-sharing and 18% in the case of share ownership. However, econometric models which deal with selection by plants and workers into profit-sharing schemes suggest that the effect on total compensation is much smaller: between 4% (from a difference-in-differences regression) and  2.5% (from a comparison of matched pairs). We find no evidence that high-skilled white-collar workers benefit more strongly from profit-sharing schemes. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal for Labour Market Research Springer Journals

The impact of financial participation on workers' compensation

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References (42)

Publisher
Springer Journals
Copyright
Copyright © 2010 by Institut für Arbeitsmarkt- und Berufsforschung
Subject
Economics; Labor Economics; Sociology, general; Human Resource Management; Economic Policy; Regional/Spatial Science; Population Economics
ISSN
1614-3485
eISSN
1867-8343
DOI
10.1007/s12651-010-0032-8
Publisher site
See Article on Publisher Site

Abstract

We investigate the impact of financial participation (profit-sharing and share ownership) on workers' total compensation. Some workers' representatives have argued against the introduction of profit-sharing because they fear that profit-sharing would be a way for firms to reduce the marginal cost of hiring workers, while at the same time transferring some of the risk of variable profits from firms to workers. We find that workers in plants which operate financial participation schemes earn significantly more: 25% in the case of profit-sharing and 18% in the case of share ownership. However, econometric models which deal with selection by plants and workers into profit-sharing schemes suggest that the effect on total compensation is much smaller: between 4% (from a difference-in-differences regression) and  2.5% (from a comparison of matched pairs). We find no evidence that high-skilled white-collar workers benefit more strongly from profit-sharing schemes.

Journal

Journal for Labour Market Research – Springer Journals

Published: Jun 25, 2010

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