An important new study using US Census micro-data shows that broad-based employee share ownership is associated with meaningful, sustained productivity gains, even after controlling for management quality. The evidence base is becoming hard to ignore that when employees have a real stake, they help grow the pie.

For a UK government focused on growth, productivity and inclusive capitalism, extending and strengthening employee share ownership should be part of the toolkit. Employee share ownership is not just good for business performance; it is a practical way to ensure that the proceeds of growth are shared more equitably between labour and capital.

This is large-scale, longitudinal research, which brings US Census’s Management and Organisational Practices Survey (MOPS) data into the employee share ownership research landscape, shows that productivity gains are genuinely linked to employee ownership, not just better-run businesses. Designed by leading academics from top universities, it provides the kind of rigorous, policy-relevant evidence that should inform a pro-growth UK agenda.

The research paper can be downloaded from SSRN.