Profit Sharing and Gainsharing: A Review of Theory
Levy Economics Institute Working Paper No. 125
32 Pages Posted: 10 Oct 1998
Date Written: September 1994
The slowdown in productivity growth since the 1970s has led to increased interest in alternative compensation schemes such as profit sharing and gain sharing that might raise worker productivity and reduce turnover. In this working paper, Jones, Kato, and Pliskin summarize the rise in popularity of profit sharing (PS) and gain sharing (GS) plans; review existing theoretical and empirical work on PS and GS; and highlight findings that relate the effectiveness of such programs at raising productivity and enhancing employment stability. They also note that some existing studies contain some econometric problems relating to plan and model variables; there are measurement problems as well. Their paper primarily focuses on PS plans.
JEL Classification: J24, J33
Suggested Citation: Suggested Citation