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Works councils, collective bargaining and apprenticeship training

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Author Info

  • Ben Kriechel

    (Maastricht University and IZA Bonn)

  • Samuel Muehlemann

    (University of Bern and IZA Bonn)

  • Harald Pfeifer

    () (Federal Institute for Vocational Education and Training (BIBB) Bonn)

  • Miriam Schuette

    (Federal Institute for Vocational Education and Training (BIBB) Bonn)

Abstract

We investigate the effects of works councils on apprenticeship training. The German law attributes works councils substantial information and co-determination rights on training-related issues. Thus, works councils may also have an impact on the cost-benefit relation of workplace training. Using detailed firm-level data containing information on the costs and benefits of apprenticeship training in Germany, we apply econometric matching methods to identify works council effects. We find that firms with works councils make a significantly higher net investment in apprenticeship training compared to firms without such an institution. However, we also find that the fraction of workers still employed with the same firm five years after training is significantly higher in the presence of works councils, enabling firms to recoup training investments over a longer time horizon. All works council effects, however, are much more pronounced for firms covered by collective bargaining agreements.

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Bibliographic Info

Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0057.

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Length: 32 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:iso:educat:0057

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Related research

Keywords: Works councils; collective bargaining agreement; apprenticeship training; firm-sponsored training;

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References

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  1. John T. Addison & Paulino Teixeira & Thomas Zwick, 2007. "German Works Councils and The Anatomy of Wages," Working Paper Series 13-07, The Rimini Centre for Economic Analysis, revised Jul 2007.
  2. Anke S. Kessler & Christoph Lülfesmann, 2006. "The Theory of Human Capital Revisited: on the Interaction of General and Specific Investments," Economic Journal, Royal Economic Society, vol. 116(514), pages 903-923, October.
  3. 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).
  4. Addison, John T. & Schank, Thorsten & Schnabel, Claus & Wagner, Joachim, 2005. "Do Works Councils Inhibit Investment?," IZA Discussion Papers 1473, Institute for the Study of Labor (IZA).
  5. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, Elsevier.
  6. Uschi Backes-Gellner & Simone Tuor, 2007. "Avoiding Labor Shortages by Employer Signaling - On the Importance of Good Work Climate and Labor Relations," Working Papers 0067, University of Zurich, Institute for Strategy and Business Economics (ISU).
  7. Fitzenberger, Bernd & Kohn, Karsten & Wang, Qingwei, 2006. "The Erosion of Union Membership in Germany: Determinants, Densities, Decompositions," IZA Discussion Papers 2193, Institute for the Study of Labor (IZA).
  8. 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.
  9. Muehlemann, Samuel & Pfeifer, Harald & Walden, Günter & Wenzelmann, Felix & Wolter, Stefan C., 2010. "The financing of apprenticeship training in the light of labor market regulations," Labour Economics, Elsevier, vol. 17(5), pages 799-809, October.
  10. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
  11. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, MIT Press, vol. 124(2), pages 843-881, May.
  12. Uwe Jirjahn, 2010. "Works councils and employment growth in German establishments," Cambridge Journal of Economics, Oxford University Press, vol. 34(3), pages 475-500.
  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.
  14. Joshua C. Pinkston, 2009. "A Model of Asymmetric Employer Learning with Testable Implications," Review of Economic Studies, Wiley Blackwell, vol. 76(1), pages 367-394, 01.
  15. Schönberg, U., 2007. "Testing for asymmetric employer learning," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
  16. Dustmann, C. & Schonberg, U., 2009. "Training and Union wages," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
  17. Carola M. Frege, 2002. "A Critical Assessment of the Theoretical and Empirical Research on German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 40(2), pages 221-248, 06.
  18. John T. Addison & Paulino Teixeira, 2005. "The Effect of Works Councils on Employment Change," GEMF Working Papers 2005-06, GEMF - Faculdade de Economia, Universidade de Coimbra.
  19. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 1-35.
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Citations

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Cited by:
  1. Jens Mohrenweiser, 2012. "Recruitment and Apprenticeship Training," Economics of Education Working Paper Series 0073, University of Zurich, Institute for Strategy and Business Economics (ISU).
  2. Robert Wagner & Thomas Zwick, 2012. "How Acid are Lemons? Adverse Selection and Signalling for Skilled Labour Market Entrants," Economics of Education Working Paper Series 0071, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Feb 2012.

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