When workers share in profits: effort and responses to shirking

Freeman, Richard B. (2008) When workers share in profits: effort and responses to shirking. CEP Discussion Paper (882). London School of Economics and Political Science. Centre for Economic Performance, London, UK. ISBN 9780853282891

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Abstract

This paper summarizes new evidence from the “Shared Capitalism” Project on the extent to which workers’ earnings depend on the performance of their firm or work group in the US and advanced European countries and on the impact of sharing arrangements on economic behavior. The evidence shows that: 1) a large and growing proportion of workers are covered by shared capitalism through worker profit-sharing, bonuses, or worker ownership of shares; 2) outcomes for workers and firms are higher under shared capitalism than under other work and pay arrangements; and 3) that worker co-monitoring helps overcome the free rider problem that arises when part of workers pay depends on the productivity and effort of all workers.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk/
Additional Information:	© 2008 The author
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HN Social history and conditions. Social problems. Social reform H Social Sciences > HD Industries. Land use. Labor
JEL classification:	J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J33 - Compensation Packages; Payment Methods J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets
Date Deposited:	02 Jul 2010 15:39
Last Modified:	11 Dec 2024 18:53
URI:	http://eprints.lse.ac.uk/id/eprint/28499

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