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Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes

Author

Listed:
  • Anja Decressin
  • Julia Lane
  • Kristin McCue
  • Martha Stinson

Abstract

What do firms gain by offering benefits? Economists have proposed two payoffs: (i) benefits may be a more cost-effective form of compensation than wages for employees facing high marginal tax rates, and (ii) benefits may attract a more stable, skilled workforce. Both should improve firm outcomes, but we have little evidence on this matter. This paper exploits a rich new dataset to examine how firm productivity and survival are related to benefit offering, and finds that benefit-offering firms have higher productivity and higher survival rates. Differences in firm and workforce characteristics explain some but not all of the differences in outcomes.

Suggested Citation

  • Anja Decressin & Julia Lane & Kristin McCue & Martha Stinson, 2005. "Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes," Longitudinal Employer-Household Dynamics Technical Papers 2005-01, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:tpaper:2005-01
    as

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    File URL: https://www2.census.gov/ces/tp/tp-2005-01.pdf
    File Function: First version, 2005
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    References listed on IDEAS

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    Cited by:

    1. Tuuli Juurikkala & Olga Lazareva, 2006. "Non-wage benefits, costs of turnover, and labor attachment: evidence from Russian firms," Working Papers w0062, Center for Economic and Financial Research (CEFIR).
    2. Tuuli Juurikkala & Olga Lazareva, 2012. "Non‐wage benefits, costs of turnover and labour attachment," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(1), pages 113-136, January.
    3. Park, Timothy A., 2008. "Evaluating Labor Productivity in Food Retailing," Agricultural and Resource Economics Review, Cambridge University Press, vol. 37(2), pages 288-300, October.
    4. Holland, Sara B., 2017. "Firm investment in human health capital," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 374-390.
    5. repec:zbw:bofitp:2006_004 is not listed on IDEAS
    6. Rosemary Hyson & Alice Zawacki, 2008. "Health-Related Research Using Confidential U.S. Census Bureau Data," Working Papers 08-21, Center for Economic Studies, U.S. Census Bureau.
    7. Juurikkala, Tuuli & Lazareva, Olga, 2006. "Non-wage benefits, costs turnover, and labor attachment: evidence from Russian firms," BOFIT Discussion Papers 4/2006, Bank of Finland Institute for Emerging Economies (BOFIT).

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