Advanced Search
MyIDEAS: Login to save this article or follow this journal

Rent Seeking, Employment Security, and Works Councils: Theory and Evidence for Germany

Contents:

Author Info

  • Michael Beckmann
  • Silvia Föhr
  • Matthias Kräkel

Abstract

We highlight two effects of a works council that seem contradictory: the rent-seeking effect, which claims that a works council is set up by the workers to extract large rents from their employer, and the employment-security effect, which asserts that a works council is founded if the firm is financially stressed and workers are afraid of being dismissed. since firms realize large rents only in good financial situations, there is a strict trade-off between both effects. We derive both the rent-seeking and the employment-security effects theoretically, then test our theoretical approach with German firm-level data. our econometric analysis clearly supports the rent-seeking effect, but not the employment-security effect.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.vhb.de/sbr/pdfarchive.html
Download Restriction: no

Bibliographic Info

Article provided by LMU Munich School of Management in its journal Schmalenbach Business Review.

Volume (Year): 62 (2010)
Issue (Month): 1 (January)
Pages: 2-40

as in new window
Handle: RePEc:sbr:abstra:v:62:y:2010:i:1:p:2-40

Contact details of provider:
Postal: Geschwister-Scholl-Platz 1, 80539 Muenchen
Phone: 0049 89 2180 2166
Fax: 0049 89 2180 6327
Web page: http://www.sbr-online.com
More information through EDIRC

Related research

Keywords: Employment Security; Foundation of a Works council; Rent Seeking;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Gralla, Rafael & Kraft, Kornelius, 2012. "Higher Wages, Overstaffing or Both? The Employer's Assessment of Problems Regarding Wage Costs and Staff Level in Co-Determined Establishments," IZA Discussion Papers 7021, Institute for the Study of Labor (IZA).
  2. Prantl, Susanne & Spitz-Oener, Alexandra, 2014. "Interacting product and labor market regulation and the impact of immigration on native wages," IAB Discussion Paper 201404, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  3. Grund, Christian & Schmitt, Andreas, 2013. "Works Councils, Quits and Dismissals in Germany," IZA Discussion Papers 7361, Institute for the Study of Labor (IZA).
  4. Gralla, Rafael & Kraft, Kornelius, 2012. "Separating Introduction Effects from Selectivity Effects: The Differences in Employment Patterns of Co-Determined Firms," IZA Discussion Papers 7022, Institute for the Study of Labor (IZA).
  5. Oberfichtner, Michael, 2013. "Works council introductions: Do they reflect workers' voice?," Discussion Papers 83, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  6. 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.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sbr:abstra:v:62:y:2010:i:1:p:2-40. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (sbr) The email address of this maintainer does not seem to be valid anymore. Please ask sbr to update the entry or send us the correct address.

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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