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Works Councils and Establishment Productivity

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  • Steffen Mueller

Abstract

Declining union density in many industrialized countries increases interest in alternative forms of employee representation, such as works councils. The German works council is one of the most powerful forms of worker representation in developed countries, but little is known of its causal effect on productivity. The author used a large linked employer-employee panel data set to examine this issue. Comparing firms with and without a works council, the author finds that establishments with a works council are on average 6.4% more productive; but he also presents evidence that this figure underestimates the true productivity effect of works councils.

Suggested Citation

  • Steffen Mueller, 2012. "Works Councils and Establishment Productivity," ILR Review, Cornell University, ILR School, vol. 65(4), pages 880-898, October.
  • Handle: RePEc:sae:ilrrev:v:65:y:2012:i:4:p:880-898
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    File URL: http://ilr.sagepub.com/content/65/4/880.abstract
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    Cited by:

    1. Uwe JIRJAHN & Stephen C. SMITH, 2018. "Nonunion Employee Representation: Theory And The German Experience With Mandated Works Councils," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 201-233, March.
    2. Hirsch, Boris & Müller, Steffen, 2018. "Firm wage premia, industrial relations, and rent sharing in Germany," IWH Discussion Papers 2/2018, Halle Institute for Economic Research (IWH).
    3. Oberfichtner, Michael, 2013. "Works council introductions: Do they reflect workers' voice?," Discussion Papers 83, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    4. repec:bla:annpce:v:89:y:2018:i:1:p:201-233 is not listed on IDEAS
    5. Boris Hirsch & Steffen Müller, 2018. "Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany," CESifo Working Paper Series 6890, CESifo Group Munich.
    6. Jirjahn, Uwe & Mohrenweiser, Jens, 2013. "Active owners and the failure of newly adopted works councils," ZEW Discussion Papers 13-080, ZEW - Leibniz Centre for European Economic Research.
    7. 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.
    8. Daniel Arnold & Tobias Brändle & Laszlo Goerke, 2014. "Sickness Absence and Works Councils - Evidence from German Individual and Linked Employer-Employee Data," IAW Discussion Papers 107, Institut für Angewandte Wirtschaftsforschung (IAW).
    9. Mark Harcourt & Helen Lam & Richard Croucher, 2015. "The right-to-manage default rule," Industrial Relations Journal, Wiley Blackwell, vol. 46(3), pages 222-235, May.
    10. Boris Kaiser, 2016. "Decomposing differences in arithmetic means: a doubly robust estimation approach," Empirical Economics, Springer, vol. 50(3), pages 873-899, May.

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