THE ELUSIVE ESOP PRODUCTIVITY LINK EVIDENCE FROM UNITED-STATES FIRM-LEVEL DATA

This paper investigates whether employee participation in ownership or profit-sharing in publicly held firms through an ESOP or profit-shari ng plan was positively associated with productivity measures. The samp le consists of firms that adopted such plans during 1982 through 1987. Production function models augmented with age variables for ESOP and profit-sharing plans were estimated using panel data procedures. The p roductivity effect increased with the age of the ESOP at the rate of 1 .8 to 2.7 percent per annum and with the age of the profit-sharing pla n at the rate of 3.9 to 4.6 percent per annum.