How Does Shared Capitalism Affect Economic Performance in the UK?

34 Pages Posted: 18 Aug 2008 Last revised: 2 Sep 2008

See all articles by Alex Bryson

Alex Bryson

UCL; National Institute of Economic and Social Research (NIESR)

Richard B. Freeman

National Bureau of Economic Research (NBER); University of Edinburgh - School of Social and Political Studies; Harvard University; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Date Written: August 2008

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.

Suggested Citation

Bryson, Alex and Freeman, Richard B., How Does Shared Capitalism Affect Economic Performance in the UK? (August 2008). NBER Working Paper No. w14235. Available at SSRN: https://ssrn.com/abstract=1230857

Alex Bryson

UCL ( email )

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Richard B. Freeman (Contact Author)

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Harvard University ( email )

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