IDEAS home Printed from https://ideas.repec.org/a/sae/ecoind/v45y2024i1p83-115.html
   My bibliography  Save this article

Wage determination in the shadow of the law: The case of works councilors in Germany

Author

Listed:
  • Laszlo Goerke

    (Institute for Labor Law and Industrial Relations in the European Union (IAAEU) – Trier University, Germany; IZA, Bonn, Germany; CESifo, Munich, Germany; GLO)

  • Markus Pannenberg

    (Department of Business and Economics, University of Applied Sciences, Bielefeld, Germany; IZA, Bonn, Germany; GLO)

Abstract

The German law on co-determination at the plant level ( Betriebsverfassungsgesetz ) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. However, lavish payments to works councilors in some large firms have generated a debate about the need to reform the law. This article offers an empirical basis for the discussion and provides representative evidence on wage payments to works councilors for the period 2001–2015. The authors find wage premia of 3–7% in OLS specifications, but observe no wage differentials in linear fixed-effects panel data specifications. Similar results are found for various subgroups of employees and when focusing on employees in particular types of firms. Hence, the results indicate that payments to works councilors are broadly in line with legal regulations.

Suggested Citation

  • Laszlo Goerke & Markus Pannenberg, 2024. "Wage determination in the shadow of the law: The case of works councilors in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 45(1), pages 83-115, February.
    • Handle: RePEc:sae:ecoind:v:45:y:2024:i:1:p:83-115
    DOI: 10.1177/0143831X221139331
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0143831X221139331
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0143831X221139331?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecoind:v:45:y:2024:i:1:p:83-115. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.ekhist.uu.se/english.htm .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.