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The Causes and Consequences of Adopting a Works Council

  • Kornelius Kraft

    ()

    (Universität Dortmund)

  • Julia Lang

    ()

    (Universität Dortmund)

This paper reports on the results of a study on the determinants of the introduction of a works council and its consequences.We consider the effects of expectations concerning the economic conditions of a firm on the probability of adopting a works council. This is done, on the one hand, by use of employees’ expectations on employment security and, on the other hand, by including forecasts of the management concerning employment growth and business conditions. Secondly, the effects of the introduction of works councils on wages and overtime working are investigated. Works councils are introduced when employees are concerned about job security. After the introduction of a works council the concerns about job security are less pronounced.

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Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 228 (2008)
Issue (Month): 5+6 (December)
Pages: 512-532

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Handle: RePEc:jns:jbstat:v:228:y:2008:i:5-6:p:512-532
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  1. Andrew E. Clark & Fabien Postel-Vinay, 2004. "Job security and job protection," DELTA Working Papers 2004-16, DELTA (Ecole normale supérieure).
  2. Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
  3. Addison, John T. & Bellmann, Lutz & Schnabel, Claus & Wagner, Joachim, 2002. "German Works Councils Old and New: Incidence, Coverage and Determinants," IZA Discussion Papers 495, Institute for the Study of Labor (IZA).
  4. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works Councils and the Anatomy of Wages," IZA Discussion Papers 2474, Institute for the Study of Labor (IZA).
  5. Bauer, Thomas K. & Zimmermann, Klaus F., 1999. "Overtime Work and Overtime Compensation in Germany," IZA Discussion Papers 48, Institute for the Study of Labor (IZA).
  6. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
  7. Bell, David N.F. & Hart, Robert A. & Hübler, Olaf & Schwerdt, Wolfgang, 2000. "Paid and Unpaid Overtime Working in Germany and the UK," IZA Discussion Papers 133, 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. Addison, John T. & Bellmann, Lutz & Schnabel, Claus & Wagner, Joachim, 2002. "The Long Awaited Reform of the German Works Constitution Act," IZA Discussion Papers 422, Institute for the Study of Labor (IZA).
  10. Hubler, Olaf, 1989. "Individual overtime functions with double correction for selectivity bias," Economics Letters, Elsevier, vol. 29(1), pages 87-90.
  11. 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.
  12. FitzRoy, Felix R & Kraft, Kornelius, 1985. "Unionization, Wages and Efficiency: Theories and Evidence from the U.S. and West Germany," Kyklos, Wiley Blackwell, vol. 38(4), pages 537-54.
  13. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  14. 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.
  15. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  16. Fitzroy, Felix R & Kraft, Kornelius, 1987. "Efficiency and Internal Organization: Works Councils in West German Firms," Economica, London School of Economics and Political Science, vol. 54(216), pages 493-504, November.
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