Works Councils and Employment Growth in German Establishments

Posted: 3 May 2010

See all articles by Uwe Jirjahn

Uwe Jirjahn

University of Trier - Faculty of Economics

Date Written: 2010

Abstract

Using data from German manufacturing establishments, this article examines the relationship between works councils and employment growth. Taking the endogeneity of councils into account, the estimates show a positive growth effect of works councils. This suggests that the performance-enhancing voice role of German works councils dominates their monopoly role. Moreover, the findings of this study support the hypothesis that workers are more likely to implement a council to protect their quasi-rents when the establishment is facing a long-term crisis.

Keywords: Works councils, Co-determination, Unions, Employment

JEL Classification: J23, J51, J53

Suggested Citation

Jirjahn, Uwe, Works Councils and Employment Growth in German Establishments (2010). Cambridge Journal of Economics, Vol. 34, Issue 3, pp. 475-500, 2010, Available at SSRN: https://ssrn.com/abstract=1599047 or http://dx.doi.org/10.1093/cje/bep012

Uwe Jirjahn (Contact Author)

University of Trier - Faculty of Economics ( email )

Trier, 54286
Germany

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