Has Profit Sharing Led to Fewer Separations?

Kenneth Snellman

No 187, Working Papers from Työn ja talouden tutkimus LABORE, Labour Institute for Economic Research LABORE

Abstract: This study examines the e ect of profit sharing on the employee turnover in firms. The existence of a profit sharing programme (or performance related pay) in a firm is in general associated with a reduction in the probability of separation for salaried employees by 1–2 percentage points for the average employee. It is doubtful whether there is a reduction in the turnover for wage earners. The estimates indicate that more firm-specific human capital relative to general human capital is associated with a lower probability of separation.

Pages: 20 pages
Date: 2002-12-09
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