Does profit sharing increase training by reducing turnover?

Green, C and Heywood, J S (2007) Does profit sharing increase training by reducing turnover? Working Paper. The Department of Economics, Lancaster University.

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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.

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11 Jul 2011 21:20
Last Modified:
22 Nov 2022 15:13