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Works Councils, Collective Bargaining and Apprenticeship Training

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Author Info

  • Kriechel, Ben

    ()
    (Economix Research & Consulting)

  • Mühlemann, Samuel

    ()
    (University of Munich)

  • Pfeifer, Harald

    ()
    (BIBB)

  • Schuette, Miriam

    (BIBB)

Abstract

In this paper, we investigate the effects of works councils on apprenticeship training in Germany. The German law attributes works councils substantial information and co-determination rights to 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, we find that firms with works councils make a significantly higher net investment in training compared with firms without such an institution. We also find that the fraction of former trainees still employed with the same firm five years after training is significantly higher in the presence of works councils, thus enabling firms to recoup training investments over a longer time horizon. Furthermore, all works council effects are much more pronounced for firms covered by collective bargaining agreements.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6497.

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Length: 32 pages
Date of creation: Apr 2012
Date of revision:
Publication status: published in: Industrial Relations, 2014, 66 (5), 1095-1112
Handle: RePEc:iza:izadps:dp6497

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

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References

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  1. Joshua C. Pinkston, 2006. "A Model of Asymmetric Employer Learning With Testable Implications," Working Papers, U.S. Bureau of Labor Statistics 390, U.S. Bureau of Labor Statistics.
  2. Uta Schönberg, 2007. "Testing for Asymmetric Employer Learning," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 25, pages 651-691.
  3. Wagner, Joachim & Schnabel, Claus & Schank, Thorsten & Addison, John T., 2005. "Do Works Councils Inhibit Investment?," Discussion Papers 32, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  4. Addison, John T. & Schnabel, Claus & Wagner, Joachim, 2003. "The course of research into the economic consequences of German works councils," Discussion Papers 22, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  5. repec:bla:restud:v:76:y:2009:i:1:p:367-394 is not listed on IDEAS
  6. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2009. "Work councils and separations: voice, monopoly, and insurance effects," Discussion Papers 62, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  7. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 107(3), pages 539-572, June.
  8. Uwe Jirjahn, 2010. "Works councils and employment growth in German establishments," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 34(3), pages 475-500.
  9. Uschi Backes-Gellner & Simone Tuor, 2007. "Avoiding Labor Shortages by Employer Signaling - On the Importance of Good Work Climate and Labor Relations," Economics of Education Working Paper Series, University of Zurich, Institute for Strategy and Business Economics (ISU) 0010, University of Zurich, Institute for Strategy and Business Economics (ISU).
  10. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
  11. Christoph Luelfesmann, 2000. "The Theory of Human Capital Revisited: On the Interaction of General and Specific Investments," Econometric Society World Congress 2000 Contributed Papers, Econometric Society 0659, Econometric Society.
  12. 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, Scottish Economic Society, vol. 50(4), pages 471-491, 09.
  13. 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).
  14. 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, Elsevier, vol. 17(5), pages 799-809, October.
  15. Dustmann, Christian & Schönberg, Uta, 2004. "Training and Union Wages," IZA Discussion Papers 1435, Institute for the Study of Labor (IZA).
  16. 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.
  17. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 25, pages 1-35.
  18. 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.
  19. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, Elsevier, Elsevier.
  20. 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, London School of Economics, vol. 40(2), pages 221-248, 06.
  21. John T. Addison & Paulino Teixeira & Thomas Zwick, 2007. "German Works Councils and The Anatomy of Wages," Working Paper Series, The Rimini Centre for Economic Analysis 13-07, The Rimini Centre for Economic Analysis, revised Jul 2007.
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Citations

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Cited by:
  1. Samuel Muehlemann & Harald Pfeifer & Felix Wenzelmann, 2013. "The Costs of Recruiting Apprentices: Evidence from German Firm-Level Data," Economics of Education Working Paper Series, University of Zurich, Institute for Strategy and Business Economics (ISU) 0095, University of Zurich, Institute for Strategy and Business Economics (ISU).
  2. Wagner, Robert & Zwick, Thomas, 2012. "How acid are lemons? Adverse selection and signalling for skilled labour market entrants," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 12-014, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Uwe Cantner & Wolfgang Gerstlberger & Ipsita Roy, 2014. "Works Councils, Training Activities and Innovation: A Study of German Firms," Jena Economic Research Papers, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics 2014-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  4. Mohrenweiser, Jens & Zwick, Thomas, 2014. "Youth unemployment after apprenticeship training and individual, occupation and training employer characteristics," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 14-052, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. Jens Mohrenweiser, 2012. "Recruitment and Apprenticeship Training," Economics of Education Working Paper Series, University of Zurich, Institute for Strategy and Business Economics (ISU) 0073, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Aug 2013.

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