TY  - JOUR
AU  - Engelhardt,Gary V.
AU  - Madrian,Brigitte C.
TI  - Employee Stock Purchase Plans
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10421
PY  - 2004
Y2  - April 2004
UR  - http://www.nber.org/papers/w10421
L1  - http://www.nber.org/papers/w10421.pdf
N1  - Author contact info:
Gary V. Engelhardt
Center for Policy Research
423 Eggers Hall
Syracuse University
Syracuse, NY  13244-1020
Tel: (315) 443-3114
Fax: (315) 443-1081
E-Mail: gvengelh@maxwell.syr.edu

Brigitte C. Madrian
John F. Kennedy School of Government
Harvard University
79 JFK Street
Cambridge, MA 02138
Tel: 617-495-8917
Fax: 617-496-5960
E-Mail: Brigitte_Madrian@Harvard.edu
AB  - Employee stock purchase plans (ESPPs) are designed to promote employee stock ownership broadly within the firm and provide another tax-deferred vehicle for individual capital accumulation in addition to traditional pensions, 401(k)s, and stock options. We outline the individual and corporate tax treatment of ESPPs and the circumstances under which ESPPs will be preferred to cash compensation from a purely tax perspective. We then examine empirically ESPP participation using administrative data from 1997-2001 for a large health services company that employs approximately 30,000 people. The picture that emerges from the analysis of these data suggests that there is substantial non-participation in these plans even though all employees could increase gross compensation through participation. We discuss a number of potential explanations for non-participation.
ER  -