Profit Sharing, Separation and Training

20 Pages Posted: 16 Nov 2011

See all articles by Colin P. Green

Colin P. Green

Department of Economics

John S. Heywood

University of Wisconsin at Milwaukee

Multiple version iconThere are 2 versions of this paper

Date Written: December 2011

Abstract

Theory presents two broad channels through which profit sharing can increase worker training. First, it directly increases training by alleviating hold‐up problems and/or by encouraging co‐workers to provide training. Second, it indirectly increases training by reducing worker separation and increasing training investments' amortization period. This article provides the first attempt at separately identifying these two channels. We confirm a strong direct effect, but also identify a weaker, more tenuous indirect effect. This suggests that profit sharing's influence on training is unlikely to operate primarily through its reduction on separations while simultaneously presenting the first evidence confirming the prediction of an indirect causation.

Suggested Citation

Green, Colin P. and Heywood, John S., Profit Sharing, Separation and Training (December 2011). British Journal of Industrial Relations, Vol. 49, Issue 4, pp. 623-642, 2011, Available at SSRN: https://ssrn.com/abstract=1960421 or http://dx.doi.org/10.1111/j.1467-8543.2010.00805.x

Colin P. Green

Department of Economics ( email )

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John S. Heywood

University of Wisconsin at Milwaukee ( email )

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