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The Dynamic Effects of Works Councils on Labour Productivity: First Evidence from Panel Data

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  • Steffen Mueller
  • Jens Stegmaier

Abstract

We estimate dynamic effects of works councils on labor productivity using newly available information from West German establishment panel data. Conditioning on plant fixed effects and control variables, we find negative productivity effects during the first five years after council introduction, but a steady and substantial increase in the councils' productivity effect thereafter. Given the frequently reported positive correlation between council existence and plant productivity, this finding supports causal interpretations.
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  • Steffen Mueller & Jens Stegmaier, 2017. "The Dynamic Effects of Works Councils on Labour Productivity: First Evidence from Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 372-395, June.
  • Handle: RePEc:bla:brjirl:v:55:y:2017:i:2:p:372-395
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    File URL: http://hdl.handle.net/10.1111/bjir.2017.55.issue-2
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    Citations

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    Cited by:

    1. Müller, Steffen & Stegmaier, Jens, 2017. "Why is there resistance to works councils in Germany? An economic perspective," IWH Discussion Papers 23/2017, Halle Institute for Economic Research (IWH).
    2. Hirsch, Boris & Müller, Steffen, 2018. "Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany," IZA Discussion Papers 11309, Institute for the Study of Labor (IZA).
    3. Kato, Takao & Kodama, Naomi, 2015. "Work-Life Balance Practices, Performance-Related Pay, and Gender Equality in the Workplace: Evidence from Japan," IZA Discussion Papers 9379, Institute for the Study of Labor (IZA).
    4. Daniel Arnold & Tobias Brändle & Laszlo Goerke, 2014. "Sickness Absence and Works Councils - Evidence from German Individual and Linked Employer-Employee Data," IAAEU Discussion Papers 201410, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    5. Pedro S. Martins, 2018. "The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds," Working Papers 93, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    6. Genz, Sabrina & Bellmann, Lutz & Matthes, Britta, 2018. "Do German Works Councils Counter or Foster the Implementation of Digital Technologies?," IZA Discussion Papers 11616, Institute for the Study of Labor (IZA).
    7. KATO Takao & KODAMA Naomi, 2015. "Performance-related Pay and Productivity: Evidence from Japan," Discussion papers 15088, Research Institute of Economy, Trade and Industry (RIETI).
    8. Kerndler, Martin, 2017. "Wage flexibility of older workers and the role of institutions - evidence from the German LIAB data set," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168160, Verein für Socialpolitik / German Economic Association.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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