Shared Capitalism in the U.S. Economy? Prevalence, Characteristics, and Employee Views of Financial Participation in Enterprises

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

See all articles by Douglas L. Kruse

Douglas L. Kruse

Rutgers University

Joseph Blasi

Rutgers School of Management and Labor Relations - New Brunswick

Rhokeun Park

Rutgers University

Date Written: August 2008

Abstract

Between one-third and one-half of employees participate directly in company performance through profit sharing, gainsharing, employee ownership, or stock options. This flies in the face of concerns about the free rider problem and worker risk aversion in group incentives, and raises many questions about the effects on firms and workers. This paper lays out the major reasons we may see such "shared capitalism" plans, and reviews recent nationally representative surveys on the prevalence of these plans. We also introduce the NBER shared capitalism data, based on questions added to the 2002 and 2006 General Social Surveys (GSS) and more than 40,000 employee surveys from 14 companies with different combinations of shared capitalism plans. We find that while shared capitalism exists broadly throughout the economy, it is more likely in larger establishments. The free rider effect may be countered by the use of other policies to create productive teamwork and a cooperative culture: shared capitalism is positively linked to workplace decision-making, training, job security, teamwork, the ability to easily observe co-worker performance, and low levels of supervision. Also, more risk-averse employees avoid participating in several types of shared capitalism, but two-thirds of even the most risk-averse employees in these companies say they want shared capitalism as part of their pay package. The effects of these plans for both workers and firms are more fully explored in accompanying papers.

Suggested Citation

Kruse, Douglas L. and Blasi, Joseph R. and Park, Rhokeun, Shared Capitalism in the U.S. Economy? Prevalence, Characteristics, and Employee Views of Financial Participation in Enterprises (August 2008). NBER Working Paper No. w14225. Available at SSRN: https://ssrn.com/abstract=1231683

Douglas L. Kruse (Contact Author)

Rutgers University ( email )

Piscataway, NJ 08854
United States
908-445-5991 (Phone)
908-445-2830 (Fax)

Joseph R. Blasi

Rutgers School of Management and Labor Relations - New Brunswick ( email )

Piscataway, NJ 08854
United States
732-445-5444 (Phone)
732-445-2830 (Fax)

Rhokeun Park

Rutgers University ( email )

Piscataway, NJ 08854
United States

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