Arbeitspapier

The Inefficiency of Employment and the Case for Workplace Democracy

While most working people are in employment, there is little realisation that this relationship is inefficient and inequitable due to mis-aligned incentives – employers, as residual claimants, have an incentive to elicit greater than socially optimal effort from workers, thus generating conflict and exploitation, while workers have no 'voice' and 'exit' is costly. Workplace democracy combines efficiency and equity, aligning incentives and giving workers their natural right of self-determination, but is relatively rare due to the historically constructed power of concentrated capital owners. We show how workplace democracy can be established without expropriating capital owners, yielding efficiency and welfare gains.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 14065

Classification
Wirtschaft
Subject
employment
workplace democracy

Event
Geistige Schöpfung
(who)
FitzRoy, Felix
Nolan, Michael A.
Event
Veröffentlichung
(who)
Institute of Labor Economics (IZA)
(where)
Bonn
(when)
2021

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • FitzRoy, Felix
  • Nolan, Michael A.
  • Institute of Labor Economics (IZA)

Time of origin

  • 2021

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