The relationship between profit-sharing schemes and wages: Evidence from French firms

Abstract

The article tackles the impact of profit sharing plans (PS) on compensation policies in the French context. Using a sample of 1,143 firms from surveys of the Ministry of Labour, the authors draw up a typology based on a mix of PS plans including cash-based PS, deferred PS and the intensity of deferred plans (additional employer and employee contributions). Our results indicate that profit sharing does not seem to be considered as a way to reduce wages. Cash-based PS-oriented and high-deferred PS policies are not significantly linked to lower wages; but only firms with high-deferred PS policies are related to significantly higher wages.