Work

Profit Sharing, Teams, and Earnings

Year: 2025

Type: article

Abstract: ABSTRACT This paper examines the impact of two team arrangements on the association between profit sharing and workers' earnings. In non‐interconnected teams individuals work on a single team, whereas in interconnected teams some employees work on several teams. Using data from the European Working Conditions Survey, we find that profit sharing is generally associated with an earnings premium. This association is strengthened when profit sharing interacts with interconnected teams, but not with non‐interconnected teams. These results suggest that a standard network of (non‐interconnected) teams needs cross‐team rotation to mitigate free‐riding and enhance the productivity and earnings effects of profit sharing.

Source: Industrial Relations A Journal of Economy and Society

DOI: 10.1111/irel.70014

Authors: Marco A. Barrenechea‐Méndez, Sara Martinez‐de‐Morentin

Institutions: Universidad Pública de Navarra (UPNA), Instituto de Investigación Avanzada en Empresa y Economía

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,470