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(Reference retrieved automatically from Web of Science through information on FAPESP grant and its corresponding number as mentioned in the publication by the authors.)

Evolutionary microdynamics of employee profit sharing as productivity-enhancing device

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Lima, Gilberto Tadeu [1] ; da Silveira, Jaylson Jair [2]
Total Authors: 2
[1] Univ Sao Paulo, Dept Econ, Av Prof Luciano Gualberto 908, BR-05508010 Sao Paulo, SP - Brazil
[2] Univ Fed Santa Catarina, Dept Econ & Int Relat, Florianopolis, SC - Brazil
Total Affiliations: 2
Document type: Journal article
Source: JOURNAL OF EVOLUTIONARY ECONOMICS; v. 31, n. 2, p. 417-449, APR 2021.
Web of Science Citations: 0

We devise an analytical framework where the distribution of factor income across agents and the distribution of labor earnings across workers is influenced by the possibility of profit sharing with workers. Firms choose periodically to compensate workers with only a real base wage or a share of profits in addition to this real base wage as alternative productivity-enhancing strategies. As supported by robust empirical evidence, labor productivity is higher in profit-sharing firms than in non-sharing firms. The frequency distribution of productivity-enhancing strategies and labor productivity across firms are co-evolutionarily time-varying, which impacts on the distribution of factor income between profits and wages and thereby on the rates of employment and output growth, as well as on the distribution of labor earnings across workers. Heterogeneity in productivity-enhancing strategies across firms (and hence labor earnings inequality across workers) may be a stable long-run equilibrium outcome. This polymorphic equilibrium features the frequency of profit-sharing firms and the employment rate varying positively (negatively) with the real base wage (profit-sharing coefficient). Yet the employment rate is path dependent in the polymorphic equilibrium. As shown analytically and with numerical simulations, the microdynamics landscape is shaped by the real base wage and the profit-sharing coefficient as bifurcation parameters. (AU)

FAPESP's process: 19/03148-5 - Productive capacity utilization, economic growth and functional distribution of income in the presence of behavioral heterogeneities and patterns of interaction among agents
Grantee:Gilberto Tadeu Lima
Support Opportunities: Research Grants - Visiting Researcher Grant - Brazil