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Author: | Kruse, D. L. |
Title: | Profit-sharing and employment variability: microeconomic evidence on the Weitzman theory |
Journal: | Industrial and Labor Relations Review
1991 : APR, VOL. 40:3, p. 437-453 |
Index terms: | PROFIT SHARING MICROECONOMICS ECONOMIC THEORY LABOUR MOBILITY LABOUR TURNOVER PUBLIC POLICY BUSINESS CYCLES |
Language: | eng |
Abstract: | An important implication of Weitzman's profit-sharing theory - the prediction that profit-sharing firms will have more stable employment than fixed-wage firms - is tested using panel data on 2,976 publicly traded companies for the years 1971-85. Profit-sharing manufacturing firms are found to have had smaller employment decreases than other manufacturing firms during business downturns. No significant differences in employment stability were found, however, between the two groups of firms. If profit-sharing is the cause of any greater stability, a strong argument could be made for public policies favouring profit sharing. The subject deserves further research. |
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