Works Councils and Employment Growth in German Establishments
Posted: 3 May 2010
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: Suggested Citation