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Works Councils, Collective Bargaining and Apprenticeship Training

  • Kriechel, Ben


    (Economix Research & Consulting)

  • Mühlemann, Samuel


    (University of Munich)

  • Pfeifer, Harald



  • Schuette, Miriam


In this paper, we investigate the effects of works councils on apprenticeship training in Germany. The German law attributes works councils substantial information and co-determination rights to 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, we find that firms with works councils make a significantly higher net investment in training compared with firms without such an institution. We also find that the fraction of former trainees still employed with the same firm five years after training is significantly higher in the presence of works councils, thus enabling firms to recoup training investments over a longer time horizon. Furthermore, all works council effects are much more pronounced for firms covered by collective bargaining agreements.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6497.

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Length: 32 pages
Date of creation: Apr 2012
Date of revision:
Publication status: published in: Industrial Relations, 2014, 66 (5), 1095-1112
Handle: RePEc:iza:izadps:dp6497
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  1. Kessler, Anke & Lülfesmann, Christoph, 2000. "The Theory of Human Capital Revisited: On the Interaction of General and Specific Investments," CEPR Discussion Papers 2533, C.E.P.R. Discussion Papers.
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  3. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2009. "Works Councils and Separations: Voice, Monopoly, and Insurance Effects," IZA Discussion Papers 4126, Institute for the Study of Labor (IZA).
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  6. Wagner, Joachim & Schnabel, Claus & Schank, Thorsten & Addison, John T., 2005. "Do Works Councils Inhibit Investment?," Discussion Papers 32, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  7. Addison, John T. & Schnabel, Claus & Wagner, Joachim, 2003. "The Course of Research into the Economic Consequences of German Works Councils," IZA Discussion Papers 878, Institute for the Study of Labor (IZA).
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  10. Joshua C. Pinkston, 2006. "A Model of Asymmetric Employer Learning With Testable Implications," Working Papers 390, U.S. Bureau of Labor Statistics.
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  12. Uschi Backes-Gellner & Simone Tuor, 2007. "Avoiding Labor Shortages by Employer Signaling - On the Importance of Good Work Climate and Labor Relations," Economics of Education Working Paper Series 0010, University of Zurich, Institute for Strategy and Business Economics (ISU).
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  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. Uwe Jirjahn, 2010. "Works councils and employment growth in German establishments," Cambridge Journal of Economics, Oxford University Press, vol. 34(3), pages 475-500.
  17. Dustmann, Christian & Schönberg, Uta, 2004. "Training and Union Wages," IZA Discussion Papers 1435, Institute for the Study of Labor (IZA).
  18. Uta Schönberg, 2007. "Testing for Asymmetric Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 651-691.
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  20. 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.
  21. 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.
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