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The Role of Works Councils for Severance Payments

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  • Christian Grund
  • Johannes Martin

Abstract

Using representative German employee data, we analyse the role of works councils for the incidence of severance payments subsequent to dismissals. While there is a positive relation with severance payments after those dismissals which stem from plant closings, the incidence of a works council is negatively associated with severance pay subsequent to individual layoffs. In both cases, we find a negative moderating effect of individuals’ higher re-employment chances. We also explore gender differences and differences between the types of previously held jobs.

Suggested Citation

  • Christian Grund & Johannes Martin, 2017. "The Role of Works Councils for Severance Payments," SOEPpapers on Multidisciplinary Panel Data Research 913, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp913
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    More about this item

    Keywords

    Dismissals; Layoffs; Plant closings; Severance pay; Works councils;
    All these keywords.

    JEL classification:

    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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