Discussion paper

DP204 Profit Sharing in British Industry, 1865-1913

Some 300 profit-sharing schemes were introduced in Britain between 1865 and 1913. These were intended both to raise labour productivity and to improve industrial relations in the firms concerned. These schemes appear to have increased significantly the wages of eligible workers but were frequently abandoned after an initial period of experiment. Analysis of data concerning these schemes indicates that the method of payment and the size of firm played important roles in the survival of the schemes, but that the probability of abandonment increased with the duration of the scheme.


Hatton, T (1987), ‘DP204 Profit Sharing in British Industry, 1865-1913‘, CEPR Discussion Paper No. 204. CEPR Press, Paris & London. https://cepr.org/publications/dp204