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Councils of Contentment: Works Councils and Income Perceptions

Author

Listed:
  • Laszlo Goerke

    (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University)

  • Sven A. Hartmann

    (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University)

  • Yue Huang

    (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University)

Abstract

Using data from the German Socio-Economic Panel, we provide a comprehensive investigation of the relationship between workplace co-determination in the form of works councils and income satisfaction. Controlling for a wide range of individual, job-related, and firm-level characteristics in OLS and fixed effects specifications, we observe that employees working in establishments with a works council report significantly higher income satisfaction compared to their counterparts in non-co- determined firms. The rank in the income distribution, the perceived fairness of the wage, and working conditions emerge as quantitatively relevant factors in explaining the positive correlation.

Suggested Citation

  • Laszlo Goerke & Sven A. Hartmann & Yue Huang, 2026. "Councils of Contentment: Works Councils and Income Perceptions," IAAEU Discussion Papers 202602, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    • Handle: RePEc:iaa:dpaper:202602
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    Keywords

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    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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