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Do German Works Councils Counter or Foster the Implementation of Digital Technologies?

Author

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  • Genz, Sabrina

    (Institute for Employment Research (IAB), Nuremberg)

  • Bellmann, Lutz

    (Institute for Employment Research (IAB), Nuremberg)

  • Matthes, Britta

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

As works councils' information, consultation and co-determination rights affect the decision process of the management, works councils play a key role in the implementation of digital technologies in establishments. However, previous research focuses on the potential of digital technologies to sub-stitute for labor and its impact on labor market outcomes of workers. This paper adds the role of industrial relations to existing literature by analyzing the impact of works councils on the implementation of digital technologies. Theoretically, the role of works councils in the digital transformation is ambiguous. Using establishment data from the IAB Establishment Survey of 2016 combined with individual employee data from the Federal Employment Agency and occupational level data about the physical job exposure, empirical evidence indicates an ambivalent position of works councils to-wards digital technologies. The sole existence of works councils leads to statistically significant lower equipment levels with digital technologies. However, works councils foster the equipment with digital technologies in those establishments, which employ a high share of workers who are conducting physical demanding job activities. Thus, this study highlights the importance of establishment-level workforce representation for the digital adoption process within Germany.

Suggested Citation

  • Genz, Sabrina & Bellmann, Lutz & Matthes, Britta, 2018. "Do German Works Councils Counter or Foster the Implementation of Digital Technologies?," IZA Discussion Papers 11616, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11616
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    Cited by:

    1. Filippo Belloc & Gabriel Burdin & Luca Cattani & William Ellis & Fabio Landini, 2020. "Coevolution of Job Automation Risk and Workplace Governance," Department of Economics University of Siena 841, Department of Economics, University of Siena.
    2. Genz, Sabrina & Schnabel, Claus, 2021. "Digging into the digital divide: Workers' exposure to digitalization and its consequences for individual employment," FAU Discussion Papers in Economics 04/2021, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    3. Nikolas Schöll & Thomas Kurer, 2021. "How Technological Change Affects Regional Electorates," Working Papers 1269, Barcelona Graduate School of Economics.
    4. Valeria Cirillo & Matteo Rinaldini & Jacopo Staccioli & Maria Enrica Virgillito, 2020. "Trade unions' responses to Industry 4.0 amid corporatism and resistance," LEM Papers Series 2020/21, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Ludwig, Christine & Evans, Michaela, 2018. "Digitalisierung in der Altenpflege: Gestaltungsoptionen und Gestaltungswege für betriebliche Interessenvertretungen," Forschung Aktuell 12/2018, Institut Arbeit und Technik (IAT), Westfälische Hochschule, University of Applied Sciences.

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    More about this item

    Keywords

    co-determination; digital technologies; works councils; industrial relations; entropy balancing;
    All these keywords.

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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