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Effects of ESOP Adoption and Employee Ownership: Thirty Years of Research and Experience 

by: Freeman, Steven F.
Source: University of Pennsylvania, Center for Organizational Dynamics 

An important, but little reported development in US business has been increasing numbers of employees with ownership rights in the corporation with an increasingly large economic value. Most comes through Employee Stock Ownership Plans (ESOPs), which were established in 1974 partly as a response to anticipated shortfalls in Social Security, but also with the hope of invigorating the economy and distributing the benefits of capitalism more widely through broad-based business ownership. Experience and research indicate that ESOPs and employee ownership more generally do accomplish these aims, but large knowledge gaps remain.
Employee ownership is one of the few issues on which the political left and right can agree, and is thereby capable of attracting strong support across the US political spectrum. Recent concerns about social security solvency suggest further inducements to widening ESOPs. Given this opportunity, increased knowledge can help promote employee ownership, help ensure its wise adoption and successful implementation, and intelligently influence public policy.