THE EFFECTS OF PROFIT SHARING AND EMPLOYEE SHARE OWNERSHIP ON QUITS: EVIDENCE FROM A PANEL OF FRENCH FIRMS

This paper uses an unbalanced panel of 129 French firms over the period 1981–1991 to test the effects of two participatory schemes – profit sharing and employee share ownership – on voluntary quits. The effects of sharing schemes on productivity are well documented and most studies show positive and significant effects on productivity but their effects on quits have been less studied. This paper is the first French study looking at the effects of profit sharing and employee share ownership on quits. Our empirical investigation shows that employee share ownership reduces voluntary quits significantly whereas pure profit sharing has no significant effect.