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The Effect of Works Councils on Employment Change

Author

Listed:
  • John T. Addison

    (University of South Carolina (U.S.A.), GEMF/Universidade de Coimbra (Portugal))

  • Paulino Teixeira

    (GEMF and Faculdade de Economia, Universidade de Coimbra)

Abstract

Despite recent changes in the relationship between unionism and various indicators of firm performance, there is one seeming constant in the Anglophone countries: unions at the workplace are associated with reduced employment growth of around -2.5% a year. Using German data, we examine the impact of the works council – that country’s form of workplace representation – on employment change, 1993-2001. The German institution appears to have much the same negative effect on employment growth. That said, survival bias seems to play a small role, and works councils do not seem to further slow the tortuous pace of employment adjustment in Germany.

Suggested Citation

  • John T. Addison & Paulino Teixeira, 2005. "The Effect of Works Councils on Employment Change," GEMF Working Papers 2005-06, GEMF, Faculty of Economics, University of Coimbra.
    • Handle: RePEc:gmf:wpaper:2005-06
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    References listed on IDEAS

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    Cited by:

    1. Samuel Muehlemann & Harald Pfeifer, 2016. "The Structure of Hiring Costs in Germany: Evidence from Firm-Level Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(2), pages 193-218, April.
    2. 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.
    3. Tobias Brändle, 2017. "Flexible collective bargaining agreements: Still a moderating effect on works council behaviour?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(8), pages 1137-1153, December.
    4. Clément Brébion, 2021. "The works council wage premium in Germany: a case of strategic discrimination?," Working Papers halshs-03100169, HAL.
    5. John T. Addison & Paulino Teixeira & Thomas Zwick, 2006. "The Impact of Works Councils on Wages," GEMF Working Papers 2006-08, GEMF, Faculty of Economics, University of Coimbra.
    6. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2009. "Works Councils and Separations: Voice, Monopoly, and Insurance Effects," IZA Discussion Papers 4126, Institute of Labor Economics (IZA).
    7. Alves, Guillermo & Burdín, Gabriel & Dean, Andrés, 2016. "Workplace democracy and job flows," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 258-271.
    8. Steffen Müller & Jens Stegmaier, 2020. "Why is there resistance to works councils in Germany? An economic perspective," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 41(3), pages 540-561, August.
    9. Annette Berg & Yolanda Grift & Arjen Witteloostuijn, 2011. "Works Councils and Organizational Performance," Journal of Labor Research, Springer, vol. 32(2), pages 136-156, June.
    10. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works councils and the anatomy of wages," ZEW Discussion Papers 06-086, ZEW - Leibniz Centre for European Economic Research.
    11. Belloc, Filippo & Burdin, Gabriel & Landini, Fabio, 2020. "Corporate Hierarchies under Employee Representation," IZA Discussion Papers 13717, Institute of Labor Economics (IZA).
    12. Ben Kriechel & Samuel Muehlemann & Harald Pfeifer & Miriam Schuette, 2011. "Works councils, collective bargaining and apprenticeship training," Economics of Education Working Paper Series 0057, University of Zurich, Department of Business Administration (IBW).

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