Employee Profit-sharing and Labor Extraction in a Classical Model of Distribution and Growth
Bibliographic Data
| ID | 12228909 |
|---|---|
| Authors | Jaylson Jair da Silveira (0000-0002-0943-1283, Federal University of Santa Catarina, Florianopolis, Brazil), Gilberto Tadeu Lima (0000-0002-0307-8298, University of São Paulo, São Paulo, Brazil, corresponding author) |
| Year | 2017 |
| Volume | 29 |
| Issue | 4 |
| Pages | 613-635 |
| Publication date | 2017-10-02 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Review of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0953-8259 • E-ISSN: 1465-3982 |
| Publisher | Taylor & Francis (PUBLISHER • GB) |
| DOI | 10.1080/09538259.2018.1429149 |
| OpenAlex | W2597606480 |
| Language | EN |
| References cited | 20 |
This article sets out a classical model of economic growth in which the distribution of income features the possibility of profit-sharing with workers, as firms choose periodically between two labor-extraction compensation strategies. Workers are homogeneous with regard to labor power, and firms choose to compensate them with either only a conventional wage or a share of profits on top of this conventional wage. Empirical evidence shows that labor productivity (i.e. labor extraction) in profit-sharing firms is higher than labor productivity in non-sharing firms. The frequency distribution of labor-extraction employee compensation strategies and labor productivity across firms is time-variant, being driven by satisficing imitation dynamics from which we derive two significant results. First, heterogeneity in labor-extraction compensation strategies across firms, and hence earnings inequality across workers can be a stable long-run equilibrium outcome. Second, although convergence to a long-run equilibrium may occur with either a falling or increasing proportion of profit-sharing firms, the share of net profits in income and the rates of net profit, capital accumulation and economic growth nevertheless all converge to the highest possible long-run equilibrium values
Economics · Efficiency wage · Labour economics · Macroeconomics · Microeconomics · Productivity · Profit (economics · Profit sharing · Wage · Wage share · Cooperative Studies and Economics · Economic theories and models · Microfinance and Financial Inclusion
| Highly cited | No |
|---|