TY - UNPB

T1 - Does profit sharing increase training by reducing turnover?

AU - Green, C

AU - Heywood, J S

PY - 2007

Y1 - 2007

N2 - We test the theoretical prediction that profit sharing reduces worker separations and by doing so increases the incidence of training. Using individual level UK data, we confirm that profit sharing is a robust determinant of lower separation rates and of greater training incidence. Critically, we cannot confirm the predicted link between separations and training. Instead, the evidence supports alternative theories suggesting a direct link between profit sharing and training. Our results suggest that profit sharing changes employer-worker relations in a way that leads to greater formal and informal investment in worker skills but that this is independent of its influence on reducing separations.

AB - We test the theoretical prediction that profit sharing reduces worker separations and by doing so increases the incidence of training. Using individual level UK data, we confirm that profit sharing is a robust determinant of lower separation rates and of greater training incidence. Critically, we cannot confirm the predicted link between separations and training. Instead, the evidence supports alternative theories suggesting a direct link between profit sharing and training. Our results suggest that profit sharing changes employer-worker relations in a way that leads to greater formal and informal investment in worker skills but that this is independent of its influence on reducing separations.

KW - Profit shares

KW - Performance pay

KW - training

KW - turnover

M3 - Working paper

T3 - Economics Working Paper Series

BT - Does profit sharing increase training by reducing turnover?

PB - The Department of Economics

CY - Lancaster University

ER -