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Works councils, collective bargaining and apprenticeship training

  • Ben Kriechel

    (Maastricht University and IZA Bonn)

  • Samuel Muehlemann

    (University of Bern and IZA Bonn)

  • Harald Pfeifer

    ()

    (Federal Institute for Vocational Education and Training (BIBB) Bonn)

  • Miriam Schuette

    (Federal Institute for Vocational Education and Training (BIBB) Bonn)

We investigate the effects of works councils on apprenticeship training. The German law attributes works councils substantial information and co-determination rights on training-related issues. Thus, works councils may also have an impact on the cost-benefit relation of workplace training. Using detailed firm-level data containing information on the costs and benefits of apprenticeship training in Germany, we apply econometric matching methods to identify works council effects. We find that firms with works councils make a significantly higher net investment in apprenticeship training compared to firms without such an institution. However, we also find that the fraction of workers still employed with the same firm five years after training is significantly higher in the presence of works councils, enabling firms to recoup training investments over a longer time horizon. All works council effects, however, are much more pronounced for firms covered by collective bargaining agreements.

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File URL: http://repec.business.uzh.ch/RePEc/iso/leadinghouse/0057_lhwpaper.pdf
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Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0057.

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Length: 32 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:iso:educat:0057
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  1. John T. Addison & Paulino Teixeira & Thomas Zwick, 2008. "German Works Councils and the Anatomy of Wages," Working Paper Series 11-08, The Rimini Centre for Economic Analysis, revised Jan 2008.
  2. Joshua C. Pinkston, 2009. "A Model of Asymmetric Employer Learning with Testable Implications," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 367-394.
  3. 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.
  4. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2009. "Works Councils and Separations: Voice, Monopoly, and Insurance Effects," Working Papers 075, Bavarian Graduate Program in Economics (BGPE).
  5. John T. Addison & Thorsten Schank & Claus Schnabel & Joachim Wagner, 2007. "Do Works Councils Inhibit Investment?," ILR Review, Cornell University, ILR School, vol. 60(2), pages 187-203, January.
  6. Uwe Jirjahn, 2010. "Works councils and employment growth in German establishments," Cambridge Journal of Economics, Oxford University Press, vol. 34(3), pages 475-500.
  7. Uschi Backes-Gellner & Simone N. Tuor, 2010. "Avoiding Labor Shortages by Employer Signaling: On the Importance of Good Work Climate and Labor Relations," ILR Review, Cornell University, ILR School, vol. 63(2), pages 271-286, January.
  8. Christoph Luelfesmann, 2000. "The Theory of Human Capital Revisited: On the Interaction of General and Specific Investments," Econometric Society World Congress 2000 Contributed Papers 0659, Econometric Society.
  9. Dustmann, Christian & Schönberg, Uta, 2004. "Training and Union Wages," IZA Discussion Papers 1435, Institute for the Study of Labor (IZA).
  10. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
  11. Fitzenberger, Bernd & Kohn, Karsten & Wang, Qingwei, 2006. "The Erosion of Union Membership in Germany: Determinants, Densities, Decompositions," ZEW Discussion Papers 06-66, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  12. Uta Schönberg, 2007. "Testing for Asymmetric Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 651-691.
  13. Acemoglu, Daron & Pischke, Jörn-Steffen, 1998. "The Structure of Wages and Investment in General Training," CEPR Discussion Papers 1833, C.E.P.R. Discussion Papers.
  14. Wolter, Stefan C. & Ryan, Paul, 2011. "Apprenticeship," Handbook of the Economics of Education, Elsevier.
  15. Muehlemann, Samuel & Pfeifer, Harald & Walden, Günter & Wenzelmann, Felix & Wolter, Stefan C., 2010. "The financing of apprenticeship training in the light of labor market regulations," Labour Economics, Elsevier, vol. 17(5), pages 799-809, October.
  16. Carola M. Frege, 2002. "A Critical Assessment of the Theoretical and Empirical Research on German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 40(2), pages 221-248, 06.
  17. Hübler, Olaf & Jirjahn, Uwe, 2001. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," IZA Discussion Papers 322, Institute for the Study of Labor (IZA).
  18. John T. Addison & Paulino Teixeira, 2005. "The Effect of Works Councils on Employment Change," GEMF Working Papers 2005-06, GEMF - Faculdade de Economia, Universidade de Coimbra.
  19. John T. Addison & Claus Schnabel & Joachim Wagner, 2004. "The Course of Research into the Economic Consequences of German Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 42(2), pages 255-281, 06.
  20. repec:bla:restud:v:76:y:2009:i:1:p:367-394 is not listed on IDEAS
  21. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 1-35.
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