Résumé
In conventional firms (CFs), workers are unlikely to accept pay and hour reductions in order to secure their jobs, in particular because of information asymmetry. A specific type of firm is not subject to this information asymmetry problem because workers make decisions and share profits: worker cooperatives. In this paper, we use an exhaustive employer–employee panel French dataset in order to compare systematically adjustment to demand shocks in worker cooperatives and CFs. We find that, when faced with the same variation of demand, worker cooperatives have more stable employment and more variable pay. However, we show that this employment stability in cooperatives benefits primarily men and employees in low‐skill jobs.