The impact of employee share ownership on job quality: insights from closely held businesses

Adria Scharf

International Review of Applied Economics, 2025, vol. 39, issue 4-5, 692-716

Abstract: This article examines the relationship between the predominant form of broad-based employee ownership in the United States, the Employee Stock Ownership Plan (ESOP) and job quality, focusing on three mechanisms. First, it explores how ESOPs can directly increase employee wealth, voice and information access, by providing financial benefits and introducing modest mechanisms for employee voice and learning. Second, it investigates how ESOPs may interact with and amplify other high-quality workplace practices – such as open book management and collaborative team cultures – creating synergies that yield greater outcomes than either approach alone. Third, it discusses how ESOPs appear in some instances to safeguard jobs during transitions and downturns. Using a mixed-methods approach, this study synthesizes existing literature and qualitative data from seven new case studies of employee-owned companies across diverse industries. These companies provide rich examples of how ESOPs impact both tangible measures of job quality, such as wages and benefits, and subjective dimensions, such as job satisfaction and perceived workplace fairness. The findings reveal the nuanced ways in which ESOPs contribute to job quality and highlight the conditions under which they are most effective.

Date: 2025
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DOI: 10.1080/02692171.2025.2488767

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