Share Capitalism and Worker Wellbeing

29 Pages Posted: 30 Dec 2014

See all articles by Alex Bryson

Alex Bryson

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

Andrew Clark

Paris School of Economics (PSE); IZA Institute of Labor Economics

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)

Colin P. Green

Department of Economics

Abstract

We show that worker wellbeing is not only related to the amount of compensation workers receive but also how they receive it. While previous theoretical and empirical work has often been pre-occupied with individual performance-related pay, we here demonstrate a robust positive link between the receipt of a range of group performance schemes (profit shares, group bonuses and share ownership) and job satisfaction. Critically, this relationship remains after conditioning on wage levels, which suggests these pay methods provide utility to workers in addition to that through higher wages. These findings survive a variety of methods aimed at accounting for unobserved individual and job-specific characteristics. We investigate two potential channels for this effect. We first demonstrate that half of the positive effect can be accounted for by employees' tendency to reciprocate in return for the "gift" of share capitalism. Second, we show that these 'share capitalist' modes of pay dampen the negative wellbeing effects of what we typically think of as "bad" aspects of job quality. Finally, share-capitalist pay methods also have positive wellbeing spill-over effects on co-workers.

Keywords: compensation methods, wages, job satisfaction, working conditions

JEL Classification: J28, J33, J54, J63, J81, M52

Suggested Citation

Bryson, Alex and Clark, Andrew Eric and Freeman, Richard B. and Green, Colin P., Share Capitalism and Worker Wellbeing. IZA Discussion Paper No. 8724, Available at SSRN: https://ssrn.com/abstract=2543919

Alex Bryson (Contact Author)

UCL ( email )

20 Bedford Way
London, WC1H 0AL
United Kingdom

HOME PAGE: http://https://iris.ucl.ac.uk/iris/browse/profile?upi=ABRYS65

National Institute of Economic and Social Research (NIESR) ( email )

2 Dean Trench Street
Smith Square
London, SW1P 3HE
United Kingdom

HOME PAGE: http://www.niesr.ac.uk/staff/staffdetail.php?StaffID=307

Andrew Eric Clark

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Richard B. Freeman

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-868-3900 (Phone)
617-868-2742 (Fax)

University of Edinburgh - School of Social and Political Studies ( email )

Adam Ferguson Building
George Square
Edinburgh EH8 9LL
United Kingdom

Harvard University ( email )

Littauer Center
Cambridge, MA 02138
United States
617-868-3900 (Phone)

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE

Colin P. Green

Department of Economics ( email )

Høgskoleringen
Trondheim NO-7491, 7491
Norway

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
38
Abstract Views
426
PlumX Metrics