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The Role of Works Councils for Severance Payments

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  • Grund, Christian

    () (RWTH Aachen University)

  • Martin, Johannes

    () (RWTH Aachen University)

Abstract

Using representative German employee data, we analyse the role of works councils for the incidence of severance payments subsequent to dismissals. While there is a positive relation with severance payments after those dismissals which stem from plant closings, the incidence of a works council is negatively associated with severance pay subsequent to individual layoffs. In both cases, we find a negative moderating effect of individuals' higher reemployment chances. We also explore gender differences and differences between the types of previously held jobs.

Suggested Citation

  • Grund, Christian & Martin, Johannes, 2017. "The Role of Works Councils for Severance Payments," IZA Discussion Papers 10750, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10750
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    References listed on IDEAS

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    1. 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, June.
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    6. Uwe Jirjahn, 2009. "The Introduction of Works Councils in German Establishments - Rent Seeking or Rent Protection?," British Journal of Industrial Relations, London School of Economics, vol. 47(3), pages 521-545, September.
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    More about this item

    Keywords

    dismissals; layoffs; plant closings; severance pay; works councils;

    JEL classification:

    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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