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The Effect of Works Councils on Employment Change

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Author Info
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)

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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.

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Publisher Info
Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2005-06.

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Length: 43 pages
Date of creation: 2005
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Publication status: Published in Industrial Relations, 45(1), 2006, pages 1-24
Handle: RePEc:gmf:wpaper:2005-06

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  1. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
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  2. Machin, Stephen J & Wadhwani, Sushil, 1991. "The Effects of Unions on Organisational Change and Employment," Economic Journal, Royal Economic Society, vol. 101(407), pages 835-54, July. [Downloadable!] (restricted)
  3. 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). [Downloadable!]
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  4. Newey, Whitney K & Powell, James L & Walker, James R, 1990. "Semiparametric Estimation of Selection Models: Some Empirical Results," American Economic Review, American Economic Association, vol. 80(2), pages 324-28, May. [Downloadable!] (restricted)
  5. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932.
  6. David Blanchflower & Simon Burgess, 1996. "New Technology and Jobs: Comparative Evidence from a Two Country Study," CEP Discussion Papers dp0285, Centre for Economic Performance, LSE.
  7. Montgomery, Edward, 1989. "Employment and Unemployment Effects of Unions," Journal of Labor Economics, University of Chicago Press, vol. 7(2), pages 170-90, April. [Downloadable!] (restricted)
  8. Blanchflower, David G & Millward, Neil & Oswald, Andrew J, 1991. "Unionism and Employment Behaviour," Economic Journal, Royal Economic Society, vol. 101(407), pages 815-34, July. [Downloadable!] (restricted)
  9. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August. [Downloadable!] (restricted)
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  10. Richard J. Long, 1993. "The impact of unionization on employment growth of Canadian companies," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(4), pages 691-703, July.
  11. repec:att:wimass:19901 is not listed on IDEAS
  12. Burgess, Simon & Knetter, Michael & Michelacci, Claudio, 2000. "Employment and Output Adjustment in the OECD: A Disaggregate Analysis of the Role of Job Security Provisions," Economica, London School of Economics and Political Science, vol. 67(267), pages 419-35, August. [Downloadable!] (restricted)
  13. Olaf H¸bler & Uwe Jirjahn, 2003. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 471-491, 09. [Downloadable!] (restricted)
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  14. Addison, John T. & Belfield, Clive R., 2002. "Unions and Establishment Performance: Evidence from the British Workplace Industrial/Employee Relations Surveys," IZA Discussion Papers 455, Institute for the Study of Labor (IZA). [Downloadable!]
  15. Zwick, Thomas, 2004. "Employee participation and productivity," Labour Economics, Elsevier, vol. 11(6), pages 715-740, December. [Downloadable!] (restricted)
  16. Booth, Alison L & McCulloch, Andrew, 1999. "Redundancy Pay, Unions and Employment," Manchester School, University of Manchester, vol. 67(3), pages 346-66, June. [Downloadable!] (restricted)
  17. Katharine G. Abraham & Susan N. Houseman, 1993. "Does Employment Protection Inhibit Labor Market Flexibility? Lessons from Germany, France, and Belgium," NBER Working Papers 4390, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  1. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works councils and the anatomy of wages," ZEW Discussion Papers 06-86, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  2. John T. Addison & Paulino Teixeira & Thomas Zwick, 2006. "The Impact of Works Councils on Wages," GEMF Working Papers 2006-08, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]
  3. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2009. "Works Councils and Separations: Voice, Monopoly, and Insurance Effects," IZA Discussion Papers 4126, Institute for the Study of Labor (IZA). [Downloadable!]
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