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The Causes and Consequences of Adopting a Works Council

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Author Info

  • Kornelius Kraft

    ()
    (Universität Dortmund)

  • Julia Lang

    ()
    (Universität Dortmund)

Abstract

This paper reports on the results of a study on the determinants of the introduction of a works council and its consequences.We consider the effects of expectations concerning the economic conditions of a firm on the probability of adopting a works council. This is done, on the one hand, by use of employees’ expectations on employment security and, on the other hand, by including forecasts of the management concerning employment growth and business conditions. Secondly, the effects of the introduction of works councils on wages and overtime working are investigated. Works councils are introduced when employees are concerned about job security. After the introduction of a works council the concerns about job security are less pronounced.

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Bibliographic Info

Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 228 (2008)
Issue (Month): 5+6 (December)
Pages: 512-532

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Handle: RePEc:jns:jbstat:v:228:y:2008:i:5-6:p:512-532

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Related research

Keywords: Works council; employment security; wages; matching;

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References

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  1. Clark, Andrew E. & Postel-Vinay, Fabien, 2005. "Job Security and Job Protection," IZA Discussion Papers 1489, Institute for the Study of Labor (IZA).
  2. Hubler, Olaf, 1989. "Individual overtime functions with double correction for selectivity bias," Economics Letters, Elsevier, vol. 29(1), pages 87-90.
  3. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
  4. Hübler, Olaf & Jirjahn, Uwe, 2001. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," IZA Discussion Papers 322, Institute for the Study of Labor (IZA).
  5. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  6. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  7. 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 659-94, October.
  8. Bell, David N.F. & Hart, Robert A. & Hübler, Olaf & Schwerdt, Wolfgang, 2000. "Paid and Unpaid Overtime Working in Germany and the UK," IZA Discussion Papers 133, Institute for the Study of Labor (IZA).
  9. Bauer, Thomas & Zimmermann, Klaus F, 1999. "Overtime Work and Overtime Compensation in Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 419-36, September.
  10. Addison, John T. & Schnabel, Claus & Wagner, Joachim, 2003. "The Course of Research into the Economic Consequences of German Works Councils," IZA Discussion Papers 878, Institute for the Study of Labor (IZA).
  11. Addison, John T. & Bellmann, Lutz & Schnabel, Claus & Wagner, Joachim, 2002. "German Works Councils Old and New: Incidence, Coverage and Determinants," IZA Discussion Papers 495, Institute for the Study of Labor (IZA).
  12. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works Councils and the Anatomy of Wages," IZA Discussion Papers 2474, Institute for the Study of Labor (IZA).
  13. Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
  14. Fitzroy, Felix R & Kraft, Kornelius, 1987. "Efficiency and Internal Organization: Works Councils in West German Firms," Economica, London School of Economics and Political Science, vol. 54(216), pages 493-504, November.
  15. Addison, John T. & Bellmann, Lutz & Schnabel, Claus & Wagner, Joachim, 2002. "The Long Awaited Reform of the German Works Constitution Act," IZA Discussion Papers 422, Institute for the Study of Labor (IZA).
  16. FitzRoy, Felix R & Kraft, Kornelius, 1985. "Unionization, Wages and Efficiency: Theories and Evidence from the U.S. and West Germany," Kyklos, Wiley Blackwell, vol. 38(4), pages 537-54.
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Citations

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Cited by:
  1. Michael Beckmann & Matthias Kräkel, 2011. "Internal Rent Seeking, Works Councils, and Optimal Establishment Size," Working papers 2011/14, Faculty of Business and Economics - University of Basel.
  2. Uwe Jirjahn & Vanessa Lange, 2011. "Reciprocity and Workers' Tastes for Representation," Research Papers in Economics 2011-07, University of Trier, Department of Economics.
  3. Jens Mohrenweiser & Uschi Backes-Gellner, 2010. "Die Wirkung des Betriebsverfassungsgesetzes am Beispiel der Freistellung von Betriebsräten - ein Beitrag zur Rechtstatsachenforschung," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(4), pages 420-435, August.
  4. Uwe Jirjahn, 2010. "Nonunion Worker Representation and the Closure of Establishments: German Evidence on the Role of Moderating Factors," Research Papers in Economics 2010-01, University of Trier, Department of Economics.
  5. Katja Goerlitz, 2009. "The Development of Employers’ Training Investments Over Time – A Decomposition Analysis Using German Establishment Data," Ruhr Economic Papers 0087, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Ellguth, Peter & Gerner, Hans-Dieter & Stegmaier, Jens, 2012. "Wage bargaining in Germany : the role of works councils and opening clauses," IAB Discussion Paper 201205, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  7. Kraft, Kornelius, 2011. "Die Auswirkungen von Gewinn- und Entscheidungsbeteiligung auf den Unternehmenserfolg (The effects of profit sharing and worker participation on firm performance)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 44(1/2), pages 73-80.
  8. Uwe Jirjahn & Jens Mohrenweiser & Uschi Backes-Gellner, 2009. "Works Councils and Learning: On the Dynamic Dimension of Codetermination," Working Papers 0116, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Nov 2010.

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