Profit Sharing and Training

Kornelius Kraft and Julia Lang ()
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Julia Lang: Institute for Employment Research (IAB), Nuremberg

No 6118, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We analyze the impact of profit sharing on the share of workers receiving training. An effect is plausible because: 1) profit sharing is a credible commitment by firms to reward firm-specific skills acquired by formal or informal training, 2) profit sharing may reduce turnover and increase the returns to training, 3) a common payment for the whole workforce leads to peer group pressure to participate in training courses and raises incentives to help co-workers. In order to eliminate possible selectivity effects, we combine a matching approach with difference-in-differences. We identify the proportion of employees participating in profits and differentiate profit sharing according to the percentage of the workers covered by such remuneration schemes. Using German establishment data we find that profit sharing only has a significant effect on training intensity if the majority of the workforce benefits from it.

Keywords: training; profit sharing; matching (search for similar items in EconPapers)
JEL-codes: C14 J24 J33 M52 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-11
New Economics Papers: this item is included in nep-bec, nep-hrm and nep-lma
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Published - published in: Oxford Bulletin of Economics and Statistics, 2013, 75 (6), 940-961

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