The evaluation of economic effects of workers participation is not simple from the methodical point of view because of specific characteristics of establishments with works councils. Especially recent studies show contradictory results. In this study problems are pointed out, discussed, and options for solution are presented on the example of workers participation in East German establishments of industry and construction by the IABEstablishment Panel. An optimal matching-algorithm which supplies good matching-results for small samples to assign ‘statistical establishment-twins’ is applied. But by reason of very short primarily spells it can only calculate short time effects. Therefore, the matching method is additionally used to construct longer observation periods. By this new application establishments with recently founded works councils are matched with so called ‘proxy establishments’ with existing works councils. As a result short observation periods are prolonged and information about long-term effects can be given. The effects on productivity, profitability and qualification level of employees show neither in short-term nor in long-term a significant impact on workers’ participation.
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Paper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number
15-06.
Find related papers by JEL classification: C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
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Richard B. Freeman & Edward P. Lazear, 1995.
"An Economic Analysis of Works Councils,"
NBER Chapters,
in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 27-52
National Bureau of Economic Research, Inc.
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Other versions:
Wagner, Joachim & Schnabel, Claus & Schank, Thorsten & Addison, T. John, 2005.
"Do Works Councils Inhibit Investment?,"
Discussion Papers
32, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
[Downloadable!]