EconPapers    
Economics at your fingertips  
 

How do worker cooperatives stabilize employment? The role of profit reinvestment into locked assets

Cecilia Navarra ()
Additional contact information
Cecilia Navarra: Center for Research in the Economics of Development, University of Namur

No 1307, Working Papers from University of Namur, Department of Economics

Abstract: A frequent characteristic of worker cooperatives is the tendency to reinvest a large share of profits into asset locks: a common fund, indivisible and not appropriable by members, neither upon quitting, nor at the end of the firms life. To explain this behaviour, I introduce the hypothesis that asset locks play a significant role in employment stabilization. This can be obtained in two ways: by letting wages fluctuate, or by accumulating reinvested profits into an income stabilizing fund that allows to face downturns without firing and without reducing wages. In this second case, asset locks play a wage smoothing role. I provide evidence for this function by means of original data at the firm level and by first-hand collected survey data at the individual level on risk perception in a sample of Italian cooperatives.

Keywords: worker cooperatives; asset locks; employment stability; wage smoothing (search for similar items in EconPapers)
JEL-codes: J54 P13 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2013-06
New Economics Papers: this item is included in nep-hme and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.fundp.ac.be/eco/economie/recherche/wpseries/wp/1307.pdf First version, 2013 (application/pdf)

Related works:
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:nam:wpaper:1307

Access Statistics for this paper

More papers in Working Papers from University of Namur, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Marie-Helene Mathieu ().

 
Page updated 2021-06-08
Handle: RePEc:nam:wpaper:1307