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The impact of financial participation on workers' compensation

Andrews M, Bellmann L, Upward R, Schank T (2010)

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Publication Language: English

Publication Type: Journal article

Publication year: 2010

Journal

Publisher: Springer

Book Volume: 43

Pages Range: 72-89

Journal Issue: 1

DOI: 10.1007/s12651-010-0032-8

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.

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How to cite

APA:

Andrews, M., Bellmann, L., Upward, R., & Schank, T. (2010). The impact of financial participation on workers' compensation. Journal for labour market research, 43(1), 72-89. https://dx.doi.org/10.1007/s12651-010-0032-8

MLA:

Andrews, Martyn, et al. "The impact of financial participation on workers' compensation." Journal for labour market research 43.1 (2010): 72-89.

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