Do French firms use financial participation to transfer more risk to their workers?

Leila Baghdadi, Rihab Bellakhal () and Marc-Arthur Diaye ()
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Marc-Arthur Diaye: University of Evry Val d’Essonne, https://www.univ-evry.fr/recherche/unites-de-recherche/sciences-humaines-et-sociales/centre-detudes-des-politiques-economiques-epee.html

No 12-10, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: Several papers report a positive effect of financial participation (profit-sharing, employee share ownership) on firms’ economic performance. This increase can be obtained in two main ways: by increasing the effort (extrinsic, intrinsic or commitment) of workers, directly or indirectly through worker selection; or by transferring more risk to the workers. The question is of course not neutral. Indeed if the risk transfer story is true then it means that the increase of economic performance is obtained at the expense of workers, who support more risks. The question is especially important in France where financial participation is associated with tax exemption for firms and where it is forbidden by law to substitute base wage and profit sharing. The purpose of our paper is to use three French data sets (an employer-employee data set- and two employer panel data sets), to answer the question of whether financial participation schemes are mainly designed as a risk transfer (from firms to workers) device.

Keywords: Profit-sharing; ESOP; wage; risk sharing (search for similar items in EconPapers)
JEL-codes: J33 M52 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012-06
New Economics Papers: this item is included in nep-cdm and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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