Research on Federal Datasets Finds Employee Ownership Companies More Productive
A new research paper, Employee Share Ownership, Management Practices, and Labor Productivity: An Analysis Using Establishment Level Micro-Data from the U.S. Census, addresses long-standing questions about ESOPs and productivity. The research team, led by Fidan Ana Kurtulus at the University of Massachusetts Amherst, compiled the largest and most comprehensive data to date on broad-based employee ownership at both privately held and publicly traded US manufacturing companies. Specifically, they combined three restricted US Census micro-databases—the 2010 and 2015 Census Management and Organizational Practices Survey (MOPS), the American Survey of Manufacturers (ASM), and the US Longitudinal Business Database (LBD)—with the US Department of Labor’s Form 5500 Private Pension Plan (PPP) database.
Key Findings
The authors estimate that establishments that adopted ESOPs at some point after 2010 saw their labor productivity increase by an average of 5.6 to 6.7% when measured again in 2017. This average impact is computed by aggregating across all the 600 establishments in the database that adopted an ESOP, accounting for workplace managerial and organizational practices, the number of employees, capital and material inputs into production, union status, geography, and industry trends. That number is the total change, not a change in the annual productivity rate.
Further, the study finds "that adopting an ESOP while simultaneously maintaining broad-based group performance pay over 2010 to 2015 is associated with statistically significant growth in estimated labor productivity of 12.93%, an average increase of 2.6% per year" (p. 27).
Data and Methods
This new large dataset will allow researchers to investigate the role of workplace management and organizational practices in shaping the impact of broad-based employee share ownership on labor productivity at American manufacturing workplaces. And since the vast majority of establishments in their MOPS-ASM-LBD-Form 5500 dataset appear both in 2010 and 2015, this is a formidable establishment-level panel.
Another important advantage of their data is that it comprises the first introduction of the US Census’s Management and Organizational Practices Survey into the employee ownership research landscape. The MOPS is the largest management survey ever conducted of US manufacturing establishments. When a US company receives the Annual Survey of Manufacturers from the US Census, its management is required to complete the survey. As a result, this data set is the most representative yet assembled for analyzing the relation of employee ownership to management practices. Importantly, the ASM includes financial information about closely held companies that has not been available to researchers in previous studies comparing ESOP and non-ESOP firms, allowing for a fuller and more accurate analysis.
This new large dataset allows researchers to compare 37,800 non-ESOP manufacturing establishments in 21,500 unique companies to 6,200 ESOP manufacturing establishments in 1,000 privately held and publicly traded ESOP companies. All data is collected and analysis conducted at the establishment (physical location of the business) level, with appropriate establishments identified as ESOPs through the 5500 data.
The way they measured these key concepts are:
Workplace (i.e., establishment) labor productivity: The total value of shipments and inventory divided by total hours worked.
ESOP adoption: Whether the workplace adopted an ESOP between 2010 and 2015.
Proactive management practices: The extent and frequency of performance goal monitoring; the nature of remedial action in response to problems in the production process; the monitoring of performance goals; the presence of broad-based information sharing among workers at the workplace; and the presence of broad-based (meaning inclusive of nonmanagerial workers) group-based performance bonuses for workers at the workplace.
Detailed results and descriptions of the databases and statistical methodologies can be found in the full working paper posted on the Social Science Research Network (SSRN) e-library:
Fidan Ana Kurtulus, Eric Hoyt, Paige Ouimet, Joseph Blasi, Douglas Kruse, Richard B. Freeman, and William Castellano, Employee Share Ownership, Management Practices, and Labor Productivity: An Analysis Using Establishment Level Micro-Data from the U.S. Census (March 29, 2026), available at SSRN: https://ssrn.com/abstract=6490798 or http://dx.doi.org/10.2139/ssrn.6490798.