Profit Sharing and Gainsharing: A Review of Theory
Derek C. Jones
Hamilton College - Economics Department
Colgate University - Economics Department; Institute for the Study of Labor (IZA)
Jeffrey L. Pliskin
Hamilton College; The Levy Economics Institute
Levy Economics Institute Working Paper No. 125
The slowdown in productivity growth since the 1970s has led to increased interest in alternative compensation schemes such as profit sharing and gain sharing that might raise worker productivity and reduce turnover. In this working paper, Jones, Kato, and Pliskin summarize the rise in popularity of profit sharing (PS) and gain sharing (GS) plans; review existing theoretical and empirical work on PS and GS; and highlight findings that relate the effectiveness of such programs at raising productivity and enhancing employment stability. They also note that some existing studies contain some econometric problems relating to plan and model variables; there are measurement problems as well. Their paper primarily focuses on PS plans.
Number of Pages in PDF File: 32
JEL Classification: J24, J33
Date posted: October 10, 1998
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