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Separating Introduction Effects from Selectivity Effects:Â The Differences in Employment Patterns of Codetermined Firms

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  • Rafael Gralla
  • Kornelius Kraft

Abstract

This study examines differences in employment growth between firms with and without works councils by separating introduction effects from potential selectivity effects. Using a difference†in†differences framework, we show that firms with works councils have higher employment growth before adopting a works council. However, employment growth declines after introduction. We identify the reason for lower employment growth in reduced hiring rates, while dismissal rates remain constant.

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  • Rafael Gralla & Kornelius Kraft, 2018. "Separating Introduction Effects from Selectivity Effects:Â The Differences in Employment Patterns of Codetermined Firms," LABOUR, CEIS, vol. 32(1), pages 93-111, March.
    • Handle: RePEc:bla:labour:v:32:y:2018:i:1:p:93-111
    DOI: 10.1111/labr.12121
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    Cited by:

    1. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).
    2. Simon Jäger & Shakked Noy & Benjamin Schoefer, 2022. "What Does Codetermination Do?," ILR Review, Cornell University, ILR School, vol. 75(4), pages 857-890, August.
    3. Brändle, Tobias & Goerke, Laszlo, 2018. "The One Constant: A Causal Effect of Collective Bargaining on Employment Growth?," IZA Discussion Papers 11518, Institute of Labor Economics (IZA).
    4. Daniel Fackler & Claus Schnabel & Jens Stegmaier, 2024. "Personnel adjustments during the Covid-19 pandemic: did co-determination make a difference?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 58(1), pages 1-10, December.
    5. Steffen Mueller & Jens Stegmaier, 2017. "The Dynamic Effects of Works Councils on Labour Productivity: First Evidence from Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 372-395, June.
    6. Kraft, Kornelius & Lammers, Alexander, 2021. "The Effects of Reforming a Federal Employment Agency on Labor Demand," IZA Discussion Papers 14629, Institute of Labor Economics (IZA).
    7. Michael Oberfichtner, 2013. "Works council introductions: Do they reflect workers‘ voice?," Working Papers 137, Bavarian Graduate Program in Economics (BGPE).
    8. Tobias Brändle & Laszlo Goerke, 2018. "The one constant: a causal effect of collective bargaining on employment growth? Evidence from German linked‐employer‐employee data," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(5), pages 445-478, November.
    9. Olaf Hübler, 2015. "Do works councils raise or lower firm productivity?," IZA World of Labor, Institute of Labor Economics (IZA), pages 137-137, March.

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    More about this item

    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
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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