Risk Sharing and Layoff Risk in Profit Sharing

Raul Fabella

Philippine Review of Economics, 1995, vol. 32, issue 1, 65-78

Abstract: We show that if the employer is risk averse, however slightly, there is always a profit sharing contract that will Pareto-dominate the spot wage contract in the sense of pure risk sharing. The smaller is the employer risk aversion, the narrower is the room for profit sharing. The higher the workers value employment stability (less layoff risk), the more Pareto attractive is profit sharing regardless of employer risk aversion.

Date: 1995
References: Add references at CitEc
Citations:

Downloads: (external link)
http://pre.econ.upd.edu.ph/index.php/pre/article/view/118/477 (application/pdf)

Related works:
Working Paper: Risk Sharing and Layoff Risk in Profit Sharing (1995)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:phs:prejrn:v:32:y:1995:i:1:p:65-78

Access Statistics for this article

More articles in Philippine Review of Economics from University of the Philippines School of Economics and Philippine Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by HR Rabe ().