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

Abstract

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.