We use survey data and field research to investigate the effects of employee involvement
practices on outcomes for blue-collar workers in the auto supply industry. We find these practices
raise wages by 3-5%. The causal mechanism linking involvement and wages appears to be most
consistent with efficiency wage theories, and least consistent with compensating differences. We
find no evidence that employee involvement affects plants? survival or employment growth.MIT International Motor Vehicle Program and the Case
Western Reserve University Center for Regional Economic Issue

Bendoly, Elliot

Helper, Susan

Levine, David

Using both survey data and field research, we investigate the effects of employee involvement practices on outcomes for blue-collar workers in the auto supply industry. wages by 3-5%. The causal mechanism linking involvement and wages appears most consistent with efficiency wage theories, and least consistent with compensating differences. With respect to employment stability, we find that employee involvement has a knife-edge character. Plants with intensive programs have larger employment gains, but are also slightly more likely to go out of business. These results are consistent with employee involvement raising quality and productivity, but also increasing fixed costs for liquidity-constrained firms

Employee Involvement and Pay at U.S. and Canadian Auto Suppliers

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