Work and Income Sharing in a Rural Economy: Effect on Economic Growth and Welfare
An endogenous growth model is developed to 
explore the effect of work and income sharing (WIS) on economic growth and 
welfare in a developing rural economy. The practice of WIS is a mechanism which 
converts incremental diversity of risk into volatility reduction and overall 
welfare gain. However, the effect on economic growth is sector specific. WIS in 
the intermediate goods sector has a pro-growth effect through higher investment 
returns while in the agricultural sector it has an anti-growth effect through 
lower precautionary savings. WIS also decreases the level of regional government 
subsidies needed to achieve the optimal growth rate.