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Footsie, yeah! Share prices and worker wellbeing

Bryson, A; Clark, A; Green, C; (2021) Footsie, yeah! Share prices and worker wellbeing. Journal of Participation and Employee Ownership 10.1108/JPEO-09-2021-0010. (In press). Green open access

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Abstract

A small literature finds individual wellbeing varies with the price of company stock, but it is unclear whether this is due to wealth effects among those holding stock, or more general effects on sentiment, with individuals taking rising stock prices as an indicator of improvements in the economy. We contribute to this literature by using two data sets to establish the relationship between share prices on the one hand and worker wellbeing on the other. First, using British panel data for over 20 years we demonstrate that job satisfaction declines as share prices rise for those whose pay is not linked to firm performance; this is however not the case for those whose pay is linked to firm performance. This pattern of results persists after accounting for fixed unobserved difference across workers. We then examine share price movements and employee stock-holding in a single corporation, and provide suggestive evidence that a rise in the firm’s stock price increases the wellbeing of those who belong to its employee share purchase plan (ESPP). These effects are the greatest among those making the largest monthly contributions to the program who have the most to gain (or lose) from stock price fluctuations. There is also tentative evidence that the wellbeing effects of a higher share price are larger for those who hold the most shares. Taken together these results suggest that, whilst job satisfaction among those in the working population at large whose pay is not linked to firm performance tends to decline as stock prices rise, the job satisfaction of those whose pay is linked to firm performance is either independent of or rises with share prices. Furthermore, among those holding stock in their own company job satisfaction rises when the price of that stock is higher, suggesting the effects of share prices work at least partly via changes in wealth.

Type: Article
Title: Footsie, yeah! Share prices and worker wellbeing
Open access status: An open access version is available from UCL Discovery
DOI: 10.1108/JPEO-09-2021-0010
Publisher version: https://doi.org/10.1108/JPEO-09-2021-0010
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Share prices, employee share plans, profit sharing, worker wellbeing, job satisfaction
UCL classification: UCL
UCL > Provost and Vice Provost Offices > School of Education
UCL > Provost and Vice Provost Offices > School of Education > UCL Institute of Education
UCL > Provost and Vice Provost Offices > School of Education > UCL Institute of Education > IOE - Social Research Institute
URI: https://discovery.ucl.ac.uk/id/eprint/10136116
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