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The Heterogeneous Economic Consequences of Works Council Relations

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  • Christian Pfeifer

    () (Institute of Economics, Leuphana University Lueneburg, Germany)

Abstract

I use a question about works council relations from the 2006 wave of the IAB Establishment panel to analyze the heterogeneous effects of works councils on productivity, wages, and profits. The results indicate that the effects differ significantly between works council relationship types in a systematic pattern. The overall findings are in line with productivity-enhancing and rent-sharing functions of works councils.

Suggested Citation

  • Christian Pfeifer, 2011. "The Heterogeneous Economic Consequences of Works Council Relations," Working Paper Series in Economics 203, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:203
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    References listed on IDEAS

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    1. Uwe Jirjahn, 2011. "Ökonomische Wirkungen der Mitbestimmung in Deutschland: Ein Update," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(1), pages 3-57.
    2. 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.
    3. Dilger Alexander, 2006. "Kooperation zwischen Betriebsrat und Management / Cooperation between Works Council and Management: Die Sicht beider Seiten und deren Folgen / The View from Both Sides and its Consequences," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(5), pages 562-587, October.
    4. 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 659-694, October.
    5. Richard B. Freeman & Edward P. Lazear, 1995. "An Economic Analysis of Works Councils," NBER Chapters,in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 27-52 National Bureau of Economic Research, Inc.
    6. Uwe Jirjahn & Jens Mohrenweiser & Uschi Backes‐Gellner, 2011. "Works Councils and Learning: On the Dynamic Dimension of Codetermination," Kyklos, Wiley Blackwell, vol. 64(3), pages 427-447, August.
    7. Olaf H¸bler & Uwe Jirjahn, 2003. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 471-491, September.
    8. 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, June.
    9. Steffen Müller, 2011. "Betriebsräte und betriebliche Produktivität," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(1), pages 73-89.
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    Cited by:

    1. John S. Heywood & Uwe Jirjahn, 2014. "Variable Pay, Industrial Relations and Foreign Ownership: Evidence from Germany," British Journal of Industrial Relations, London School of Economics, vol. 52(3), pages 521-552, September.
    2. Gralla, Rafael & Kraft, Kornelius, 2012. "Higher Wages, Overstaffing or Both? The Employer's Assessment of Problems Regarding Wage Costs and Staff Level in Co-Determined Establishments," IZA Discussion Papers 7021, Institute for the Study of Labor (IZA).
    3. Arnold, Daniel & Brändle, Tobias & Goerke, Laszlo, 2013. "Sickness Absence, Works Councils, and Personnel Problems. Evidence from German Individual and Linked Employer-Employee Data," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79906, Verein für Socialpolitik / German Economic Association.
    4. VAN DEN BERG, Annette & GRIFT, Yolanda & VAN WITTELOOSTUIJN, Arjen & BOONE, Christophe & VAN DER BREMPT, Olivier, 2013. "The effect of employee workplace representation on firm performance. A cross-country comparison within Europe," ACED Working Papers 2013016, University of Antwerp, Faculty of Applied Economics.
    5. Verena Dill & Uwe Jirjahn, 2013. "Foreign Owners and the Quality of Industrial Relations in Germany," Research Papers in Economics 2013-07, University of Trier, Department of Economics.
    6. VAN DEN BERG, Annette & GRIFT, Yolanda & VAN WITTELOOSTUIJN, Arjen & BOONE, Christophe & VAN DER BREMPT, Olivier, 2013. "The effect of employee workplace representation on firm performance. A cross-country comparison within Europe," Working Papers 2013008, University of Antwerp, Faculty of Applied Economics.
    7. Uwe Jirjahn & Jens Mohrenweiser, 2013. "Active Owners and the Failure of Newly Adopted Works Councils," Research Papers in Economics 2013-04, University of Trier, Department of Economics.
    8. Julian B. Adam, 2018. "Voluntary Quits: Do Works Councils Matter? An Analysis of the Reform of the German Works Constitution Act 2001," Working Papers 179, Bavarian Graduate Program in Economics (BGPE).
    9. A. van den Berg & Y.K. Grift & A. van Witteloostuijn & C. Boone & O. van der Brempt, 2013. "The effect of employee workplace representation on firm performance: A cross-country comparison within Europe," Working Papers 13-05, Utrecht School of Economics.

    More about this item

    Keywords

    Codetermination; Firm performance; Industrial relations; Works councils;

    JEL classification:

    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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