Lump-Sums, Profit Sharing, and the Labor Costs in the Union Sector

30 Pages Posted: 17 Oct 2007 Last revised: 28 Mar 2010

See all articles by Linda A. Bell

Linda A. Bell

Haverford College - Department of Economics; IZA Institute of Labor Economics

David Neumark

University of California, Irvine - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: February 1991

Abstract

This paper documents the increase in the use of lump-sum payments and profit sharing plans in union contracts in the 1980s, and evaluates the extent to which these innovations may have contributed to moderation in the growth of labor costs, and increased pay flexibility. We find evidence that lump-sum and profit sharing arrangements reduced labor cost growth at both the aggregate and firm level. But the evidence linking these plans to labor cost flexibility is mixed; although the evidence suggests that profit sharing plans may be associated with greater flexibility at the firm level, there is no evidence that lump-sum plans increase flexibility at either the firm or aggregate level.

Suggested Citation

Bell, Linda and Neumark, David, Lump-Sums, Profit Sharing, and the Labor Costs in the Union Sector (February 1991). NBER Working Paper No. w3630. Available at SSRN: https://ssrn.com/abstract=471564

Linda Bell (Contact Author)

Haverford College - Department of Economics ( email )

Haverford, PA 19041
United States

IZA Institute of Labor Economics

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

David Neumark

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States
949-824-8496 (Phone)
949-824-2182 (Fax)

HOME PAGE: http://www.socsci.uci.edu/~dneumark/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

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

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