Profit Sharing, Risk Sharing, and Firm Size: Implications of Efficiency Wages |
| |
Authors: | Juin-Jen Chang |
| |
Institution: | (1) Institute of Economics Academia Sinica, Fu-Jen Catholic University, Nankang, Taipei, 115, Taiwan, R.O.C. |
| |
Abstract: | By taking account of output fluctuations, this paper constructs a synthesis of profit-sharing and efficiency-wage models to
highlight the role of the risk attitudes of the firm and its employees. We show, contrary to the traditional efficiency wage
theory, that in a profit-sharing economy unemployment is no longer a necessary device to induce work effort and, consequently,
the labor market equilibrium may be characterized by full employment. Such a result is more likely to be true when the economy
is characterized by small-sized firms. In addition, we also provide a preliminary sketch of the situations in which the firm
chooses a profit-sharing program or a fixed-wage one, and discuss how a firm determines its pay parameters and employment
in response to output fluctuations. |
| |
Keywords: | Profit sharing Risk sharing Efficiency wages Firm size |
本文献已被 SpringerLink 等数据库收录! |
|