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Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages

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  • Olaf H¸bler
  • Uwe Jirjahn

Abstract

This paper investigates the interaction between establishment-level codetermination and industry-level collective bargaining in Germany. Based on a bargaining model, we derive our main hypothesis: In establishments covered by collective bargaining agreements, works councils are more likely to be engaged in productivity-enhancing activities and less engaged in rent-seeking activities than their counterparts in uncovered establishments. Our empirical analysis confirms this hypothesis. The presence of works councils exerts a positive impact on productivity within the covered industrial relations regime but not within the uncovered regime. The presence of works councils has a positive effect on wages within the uncovered regime but not to the same degree within the covered regime. Copyright (c) Scottish Economic Society 2003.

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Bibliographic Info

Article provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.

Volume (Year): 50 (2003)
Issue (Month): 4 (09)
Pages: 471-491

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Handle: RePEc:bla:scotjp:v:50:y:2003:i:4:p:471-491

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  1. An Important Microcosm of Anti-Unionism
    by Jared Bernstein in On the Economy on 2013-09-12 20:47:14
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