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The Heterogeneous Economic Consequences of Works Council Relations

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  • Pfeifer, Christian

    (Leuphana University Lüneburg)

Abstract

I use a question about works council relations from the 2006 wave of the IAB Establishment panel to analyze the heterogeneous effects of works councils on productivity, wages, and profits. The results indicate that the effects differ significantly between works council relationship types in a systematic pattern. The overall findings are in line with productivity-enhancing and rent-sharing functions of works councils.

Suggested Citation

  • Pfeifer, Christian, 2011. "The Heterogeneous Economic Consequences of Works Council Relations," IZA Discussion Papers 5672, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5672
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    References listed on IDEAS

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    1. John T. Addison & Claus Schnabel & Joachim Wagner, 2004. "The Course of Research into the Economic Consequences of German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 42(2), pages 255-281, June.
    2. Richard B. Freeman & Edward P. Lazear, 1995. "An Economic Analysis of Works Councils," NBER Chapters, in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 27-52, National Bureau of Economic Research, Inc.
    3. Uwe Jirjahn & Jens Mohrenweiser & Uschi Backes‐Gellner, 2011. "Works Councils and Learning: On the Dynamic Dimension of Codetermination," Kyklos, Wiley Blackwell, vol. 64(3), pages 427-447, August.
    4. Addison, John T & Schnabel, Claus & Wagner, Joachim, 2001. "Work Councils in Germany: Their Effects on Establishment Performance," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 659-694, October.
    5. Olaf Hübler & Uwe Jirjahn, 2003. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 471-491, September.
    6. Carola M. Frege, 2002. "A Critical Assessment of the Theoretical and Empirical Research on German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 40(2), pages 221-248, June.
    7. Dilger Alexander, 2006. "Kooperation zwischen Betriebsrat und Management / Cooperation between Works Council and Management: Die Sicht beider Seiten und deren Folgen / The View from Both Sides and its Consequences," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(5), pages 562-587, October.
    8. Joel Rogers & Wolfgang Streeck, 1995. "Works Councils: Consultation, Representation, and Cooperation in Industrial Relations," NBER Books, National Bureau of Economic Research, Inc, number roge95-1.
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    Cited by:

    1. John S. Heywood & Uwe Jirjahn, 2014. "Variable Pay, Industrial Relations and Foreign Ownership: Evidence from Germany," British Journal of Industrial Relations, London School of Economics, vol. 52(3), pages 521-552, September.
    2. John T. Addison & Paulino Teixeira & Lutz Bellmann, 2023. "Performance and the Conjunction of Better Management Practices and Non-Union Workplace Representation," Journal of Labor Research, Springer, vol. 44(1), pages 1-43, June.
    3. Jirjahn, Uwe & Mohrenweiser, Jens, 2013. "Active owners and the failure of newly adopted works councils," ZEW Discussion Papers 13-080, ZEW - Leibniz Centre for European Economic Research.
    4. Adam Julian B., 2019. "Voluntary Quits: Do Works Councils Matter? An Analysis of the Reform of the German Works Constitution Act 2001," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 67-109, January.
    5. VAN DEN BERG, Annette & GRIFT, Yolanda & VAN WITTELOOSTUIJN, Arjen & BOONE, Christophe & VAN DER BREMPT, Olivier, 2013. "The effect of employee workplace representation on firm performance. A cross-country comparison within Europe," ACED Working Papers 2013016, University of Antwerp, Faculty of Business and Economics.
    6. A. van den Berg & Y.K. Grift & A. van Witteloostuijn & C. Boone & O. van der Brempt, 2013. "The effect of employee workplace representation on firm performance: A cross-country comparison within Europe," Working Papers 13-05, Utrecht School of Economics.
    7. Uwe Jirjahn & Jens Mohrenweiser, 2016. "Owner-Managers and the Failure of Newly Adopted Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 54(4), pages 815-845, December.
    8. Hans-Dieter Gerner & Holger Reinemann & Andreas Dutzi & Daniel Ludwig, 2019. "Voraussetzungen und Effekte betrieblicher Interessenvertretung in eigentümergeführten Unternehmen," ZfKE – Zeitschrift für KMU und Entrepreneurship, Duncker & Humblot, Berlin, vol. 67(2), pages 113-144.
    9. Gralla, Rafael & Kraft, Kornelius, 2012. "Higher Wages, Overstaffing or Both? The Employer's Assessment of Problems Regarding Wage Costs and Staff Level in Co-Determined Establishments," IZA Discussion Papers 7021, Institute of Labor Economics (IZA).
    10. Arnold, Daniel & Brändle, Tobias & Goerke, Laszlo, 2013. "Sickness Absence, Works Councils, and Personnel Problems. Evidence from German Individual and Linked Employer-Employee Data," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79906, Verein für Socialpolitik / German Economic Association.
    11. Verena Dill & Uwe Jirjahn, 2017. "Foreign owners and the quality of industrial relations in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 38(1), pages 5-25, February.
    12. John T. Addison & Paulino Teixeira & Philipp Grunau & Lutz Bellmann, 2023. "Works council ‘disaffection’ and establishment survivability," Scottish Journal of Political Economy, Scottish Economic Society, vol. 70(1), pages 38-67, February.
    13. VAN DEN BERG, Annette & GRIFT, Yolanda & VAN WITTELOOSTUIJN, Arjen & BOONE, Christophe & VAN DER BREMPT, Olivier, 2013. "The effect of employee workplace representation on firm performance. A cross-country comparison within Europe," Working Papers 2013008, University of Antwerp, Faculty of Business and Economics.
    14. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).

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    More about this item

    Keywords

    industrial relations; firm performance; codetermination; 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
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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