This article compares worker-owned firms and mainstream capital-owned enterprises over the business cycle. Specifically, I study whether conventional employees in worker-owned firms enjoy greater employment stability than similar workers in traditional enterprises over the business cycle, and investigate whether this stability is associated with greater volatility of working-time or wages. Unlike the literature that has compared partners of worker-owned firms to wage-earners of mainstream firms, I compare wage-earners across both type of organizations along the three margins of adjustment. The econometric analysis is based on rich Spanish administrative data and panel data methods to account for composition differences between the two types of organizations. The results show that worker-owned firms offer higher job security because they do not adjust employment levels over the business cycle as much as mainstream enterprises. Wages and working-time, instead, are equally responsive across the two types of firms. The findings can be rationalized by the presence of similar labour regulations and differences in the nature of the two type of organizations. Namely, both types of firms are constrained by regulations, such as the national Labor Code and collective bargaining, on the adjustments they can impose on Jose Garcia-Louzao is at Bank of Lithuania. * I am extremely grateful to my supervisor Ana Rute Cardoso for her continuous encouragement and advice. I would like to thank two anonymous referees, Gabriel Burdin, Caterina Gianetti, Paulo Guimaraes, Joan Llull and participants at the Workshop on Social Economy for Young Economists in Forli, the Employee Share Ownership and Profit-Sharing Workshop in Berlin, and the ENTER PhD Jamboree in London for useful comments. Financial support from the Fundacio Bancaria 'La Caixa' under the Grant LCF/BQ/DE15/1036001 is gratefully acknowledged. This work uses anonymized administrative data from the Muestra Continua de Vidas Laborales (MCVL) with the permission of Spain's Direccion General de Ordenacion de la Seguridad Social. Any opinion, findings and conclusions or recommendations expressed in this material are those of the author and do not necessarily reflect the views of the Bank of Lithuania or the Eurosystem.

† I am extremely grateful to my supervisor Ana Rute Cardoso for her continuous encouragement and advice. I would like to thank Gabriel Burdin, Caterina Gianetti, Paulo Guimaraes, Joan Llull, and participants at the Workshop on Social Economy for Young Economists in Forli, the Employee Share Ownership and Profit-Sharing Workshop in Berlin, and the ENTER PhD Jamboree in London for useful comments. Financial support from the Fundaciò Bancaria "La Caixa" under the Grant LCF/BQ/DE15/1036001 is gratefully acknowledged. This work uses anonymized administrative data from the Muestra Continua de Vidas Laborales (MCVL) with the permission of Spain's Direccion General de Ordenacion de la Seguridad Social. Any opinion, findings, and conclusions or recommendations expressed in this material are those of the author and do not necessarily reflect the views of the Bank of Lithuania or the Eurosystem. All errors are mine.

No abstract