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Share capitalism and worker wellbeing

Bryson, Alex, Clark, Andrew E., Freeman, Richard B and Green, Colin P. (2014) Share capitalism and worker wellbeing. IZA discussion papers (8724). Institute for the Study of Labor (IZA), Bonn, Germany.

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Abstract

We show that worker wellbeing is not only related to the amount of compensation workers receive but also how they receive it. While previous theoretical and empirical work has often been pre-occupied with individual performance-related pay, we here demonstrate a robust positive link between the receipt of a range of group performance schemes (profit shares, group bonuses and share ownership) and job satisfaction. Critically, this relationship remains after conditioning on wage levels, which suggests these pay methods provide utility to workers in addition to that through higher wages. These findings survive a variety of methods aimed at accounting for unobserved individual and job-specific characteristics. We investigate two potential channels for this effect. We first demonstrate that half of the positive effect can be accounted for by employees' tendency to reciprocate in return for the "gift" of share capitalism. Second, we show that these 'share capitalist' modes of pay dampen the negative wellbeing effects of what we typically think of as "bad" aspects of job quality. Finally, share-capitalist pay methods also have positive wellbeing spill-over effects on co-workers.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.iza.org/en/webcontent/index_html
Additional Information: © 2014 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J28 - Safety; Accidents; Industrial Health; Job Satisfaction; Related Public Policy
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J33 - Compensation Packages; Payment Methods
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J54 - Producer Cooperatives; Labor Managed Firms
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
J - Labor and Demographic Economics > J8 - Labor Standards: National and International > J81 - Working Conditions
M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M52 - Compensation and Compensation Methods and Their Effects (stock options, fringe benefits, incentives, family support programs, seniority issues)
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 08 Jan 2015 14:35
Last Modified: 21 May 2019 23:21
Projects: ES/I035846/1
Funders: Economic and Social Research Council Award
URI: http://eprints.lse.ac.uk/id/eprint/60657

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