An Empirical Analysis of the Relationship between Employee Ownership and Employment Stability in the Us: 1999–201

47 Pages Posted: 15 May 2018

See all articles by Fidan Ana Kurtulus

Fidan Ana Kurtulus

University of Massachusetts Amherst

Douglas Kruse

Rutgers University, New Brunswick

Date Written: June 2018

Abstract

Do firms with employee ownership (EO) programs exhibit greater employment stability in the face of economic downturns? In particular, are firms with EO programs less likely to lay off workers during negative shocks? In this article, we examine the relationship between EO programs and employment stability in the United States using longitudinal Form 5500‐CompuStat matched data on the universe of publicly traded companies during 1999–2011. We examine how firms with EO programs weathered the recessions of 2001 and 2008 in terms of employment stability relative to firms without EO programs, and also whether such firms were less likely to lay off workers when faced with negative shocks more broadly. In our econometric analyses, we use a rich array of measures of EO at firms, including the presence of EO stock in pension plans, the presence of employee stock ownership plans (ESOPs), the value of EO stock per employee, the share of the firm owned by employees, the share of workers at the firm participating in EO and the share of workers at the firm participating in ESOPs. We also consider both economy‐wide negative shock measures (increases in the unemployment rate, declines in the employment‐to‐population ratio) and firm‐specific negative shock measures (declines in firm sales, declines in firm stock price). Our results indicate that EO firms exhibit greater employment stability in the face of economy‐wide and firm‐specific negative shocks.

Suggested Citation

Kurtulus, Fidan Ana and Kruse, Douglas, An Empirical Analysis of the Relationship between Employee Ownership and Employment Stability in the Us: 1999–201 (June 2018). British Journal of Industrial Relations, Vol. 56, Issue 2, pp. 245-291, 2018. Available at SSRN: https://ssrn.com/abstract=3178401 or http://dx.doi.org/10.1111/bjir.12254

Fidan Ana Kurtulus (Contact Author)

University of Massachusetts Amherst ( email )

Department of Operations and Information Managemen
Amherst, MA 01003
United States

Douglas Kruse

Rutgers University, New Brunswick

New Brunswick, NJ
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
61
PlumX Metrics