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The reform of the German works constitution act: a critical assessment


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  • Addison, John T.
  • Bellmann, Lutz
  • Schnabel, Claus
  • Wagner, Joachim


Since 1920, the thrust of German law on workplace codetermination has changed on a number of occasions. We describe the latest swing of the legislative pendium - favoring works council formation and competence - and evaluate the case for it. We provide new information on the extent of works councils before reviewing the evidence on their economic effects, focusing on some new results from matched-plant data. If the former evidence points to a codetermination deficit, this shortfall does not appear to have negative consequences for workplace productivity, profitability, and employment. -- Seit 1920 hat sich das Mitbestimmungsrecht in Deutschland mehrfach geändert. Die letzte Änderung brachte eine Erleichterung der Errichtung und eine Stärkung von Betriebsräten mit sich. Die vorliegende Arbeit skizziert die wichtigsten Bestimmungen des Betriebsverfassungs-Reformgesetzes und beurteilt dieses aus ökonomischer Sicht. Dabei liefern wir aktuelle Informationen über die Häufigkeit und die Deckungsrate von Betriebsräten und diskutieren die empirische Evidenz zu den Auswirkungen von Betriebsräten auf den Firmenerfolg, wobei wir uns auf neue Schätzergebnisse auf der Basis von Betriebsvergleichen stützen. Selbst wenn aufgrund der geringen Häufigkeit von Betriebsräten ein Mitbestimmungsdefizit konstatiert werden kann, scheint dieses keine negativen Auswirkungen auf die betriebliche Produktivität, Profitabilität und Beschäftigung zu haben.

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Paper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 16.

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Date of creation: 2002
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Handle: RePEc:zbw:faulre:16

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Keywords: Works councils; codetermination; Germany;

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  1. Michael Lechner, 2005. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Labor and Demography, EconWPA 0505006, EconWPA.
  2. FitzRoy, Felix R & Kraft, Kornelius, 1985. "Unionization, Wages and Efficiency: Theories and Evidence from the U.S. and West Germany," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 38(4), pages 537-54.
  3. Richard B. Freeman & Edward P. Lazear, 1995. "An Economic Analysis of Works Councils," NBER Chapters, National Bureau of Economic Research, Inc, in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 27-52 National Bureau of Economic Research, Inc.
  4. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2004. "Works councils - sand or grease in the operation of German firms?," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 11(3), pages 159-161.
  5. Fitzroy, Felix R & Kraft, Kornelius, 1987. "Efficiency and Internal Organization: Works Councils in West German Firms," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 54(216), pages 493-504, November.
  6. Barbara Sianesi, 2001. "Propensity score matching," United Kingdom Stata Users' Group Meetings 2001, Stata Users Group 12, Stata Users Group, revised 23 Aug 2001.
  7. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  8. Addison, John T. & Schnabel, Claus & Wagner, Joachim, 2000. "Die mitbestimmungsfreie Zone aus ökonomischer Sicht," Discussion Papers, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics 1, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  9. Addison, John T & Schnabel, Claus & Wagner, Joachim, 1996. "German Works Councils, Profits, and Innovation," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 49(4), pages 555-82.
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