The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Worker Participation and Profit Sharing

  • John Pencavel
Reference work entry


Market economies are called ‘capitalist’ because in such economies most production is carried out in organizations owned by those who supply the firms’ financial capital. A firm is ‘owned’ by its capital investors because, first, the capital investors claim the firm’s net receipts or profits and, second, they have the authority to direct and manage (often indirectly) the firm’s activities.


Democracy Incentives Productivity Profit-sharing Worker participation 

JEL Classifications

J33 J53 J54 
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  1. Blair, M., and M. Roe (eds.). 1999. Employees and corporate governance. Washington, DC: Brookings Institution Press.Google Scholar
  2. Ichniowski, C., D. Levine, C. Olson, and G. Strauss (eds.). 2000. The American workplace: Skills, compensation, and employee involvement. Cambridge: Cambridge University Press.Google Scholar
  3. Kruse, D. 1993. Profit sharing: Does it make a difference? Kalamazoo: W.E. Upjohn Institute for Employment Research.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • John Pencavel
    • 1
  1. 1.