Employee Participation in Profit and Ownership: A Review of the Issues and Evidence

TitleEmployee Participation in Profit and Ownership: A Review of the Issues and Evidence
Publication TypeReport
Year of Publication2001
AuthorsPĂ©rotin, V, Robinson, A
InstitutionLeeds University Business School

Profit sharing and employee share ownership are widespread in the European Union. In the four largest countries, at least 17 million employees, or 19% of private sector employment, are covered by such schemes.

Financial participation is of interest for public policy because it may have positive effects on productivity and employment and could further other public policy objectives like wealth redistribution and economic democracy.

Issues for the design of policy include choosing the most effective form of intervention (e.g. tax concessions or information and education) and which types of financial participation schemes to promote. Only certain types of schemes may have effects of interest for public policy such as increasing productivity or demand for labour. The form of the scheme may also bear on other public policy concerns including risk bearing by employees and the extent of employee participation in governance.

In order to inform debates on these issues, the paper reviews economic analysis of financial participation and international empirical evidence. The evidence is provided by a wealth of studies from more than 20 countries based on information from large samples of enterprises with and without financial participation and using advanced statistical techniques to examine the effects of the schemes while taking into account the other characteristics of the firms concerned.

Full Text