Working Paper: NBER ID: w14235
Authors: Alex Bryson; Richard Freeman
Abstract: This paper uses nationally representative linked workplace-employee data from the British 2004 Workplace Employment Relations Survey to examine the operation of shared capitalist forms of pay--profit-sharing and group pay for performance, employee share ownership, and stock options--and their link to productivity. It shows that shared capitalism has grown in the UK, as it has in the US; that different forms of shared capitalist pay complement each other and other labor practices in the sense that firms use them together more than they would if they chose modes of pay and work practices independently; and that workplaces switch among schemes frequently, which suggests that they have trouble optimizing and the transactions cost of switching are relatively low. Among the single schemes, share ownership has the clearest positive association with productivity, but its impact is largest when firms combine it with other forms of shared capitalist pay and modes of organization.
Keywords: shared capitalism; economic performance; UK; productivity; employee ownership
JEL Codes: J33; L23; L25
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| shared capitalist pay (P12) | higher labor productivity (J24) |
| combination of multiple schemes (employee share ownership and profit-related pay) (J33) | higher labor productivity (J24) |
| shared capitalist pay (P12) | higher levels of employee involvement and decision-making autonomy (M54) |
| higher levels of employee involvement and decision-making autonomy (M54) | higher labor productivity (J24) |