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Works Councils, Labor Productivity and Plant Heterogeneity: First Evidence from Quantile Regressions

Author

Listed:
  • Joachim Wagner

    () (Institute of Economics, University of Lüneburg)

  • Thorsten Schank

    () (Chair of Labour and Regional Economics, Friedrich-Alexander-University Erlangen-Nuremberg)

  • Claus Schnabel

    () (Chair of Labour and Regional Economics, Friedrich-Alexander-University Erlangen-Nuremberg)

  • John T. Addison

    () (Department of Economics, University of South Carolina (US))

Abstract

Using OLS and quantile regression methods and rich cross-section data sets for western and eastern Germany, this paper demonstrates that the impact of works council presence on labor productivity varies between manufacturing and services, between plants that are or are not covered by collective bargaining, and along the conditional distribution of labor productivity. No productivity effects of works councils are found for the service sector and in manufacturing plants not covered by collective bargaining. Besides demonstrating that it is important to look at evidence based on more than one data set, our empirical findings point to the efficacy of supplementing OLS with quantile regression estimates when investigating the behavior of heterogeneous plants.

Suggested Citation

  • Joachim Wagner & Thorsten Schank & Claus Schnabel & John T. Addison, 2006. "Works Councils, Labor Productivity and Plant Heterogeneity: First Evidence from Quantile Regressions," Working Paper Series in Economics 22, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:22
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    References listed on IDEAS

    as
    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.
    2. Raul A. Barreto & Anthony W. Hughes, 2004. "Under Performers and Over Achievers: A Quantile Regression Analysis of Growth," The Economic Record, The Economic Society of Australia, vol. 80(248), pages 17-35, March.
    3. 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.
    4. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
    5. Wagner, Joachim & Addison, John T. & Schnabel, Claus & Schank, Thorsten, 2004. "Works Councils, Labor Productivity and Plant Heterogeneity: Evidence from Quantile Regressions," IZA Discussion Papers 1414, Institute for the Study of Labor (IZA).
    6. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, December.
    7. Sophia Dimelis & Helen Louri, 2002. "Foreign ownership and production efficiency: a quantile regression analysis," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 449-469, July.
    8. 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.
    9. Simon Renaud, 2006. "Works Councils and Heterogeneous Firms," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 16/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    10. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    11. 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.
    12. Addison, John T. & Bellmann, Lutz & Schnabel, Claus & Wagner, Joachim, 2002. "The reform of the German works constitution act: a critical assessment," Discussion Papers 16, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    13. Mahmut Yasar & Carl H. Nelson & Roderick Rejesus, 2006. "Productivity and Exporting Status of Manufacturing Firms: Evidence from Quantile Regressions," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(4), pages 675-694, December.
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    Cited by:

    1. Joachim Wagner, 2010. "Entry, Exit and Productivity: Empirical Results for German Manufacturing Industries," German Economic Review, Verein für Socialpolitik, vol. 11, pages 78-85, February.
    2. Wagner, Joachim, 2007. "Why More West than East German Firms Export," IZA Discussion Papers 2656, Institute for the Study of Labor (IZA).
    3. Ingrid Ott & Susanne Soretz, 2006. "Governmental activity and private capital adjustment," Working Paper Series in Economics 26, University of Lüneburg, Institute of Economics.
    4. Tobias Brändle, 2013. "Flexible Collective Bargaining Agreements: Still a Moderating Effect on Works Council Behaviour?," IAW Discussion Papers 96, Institut für Angewandte Wirtschaftsforschung (IAW).
    5. Uwe Jirjahn, 2015. "Research on Trade Unions and Collective Bargaining in Germany: The Contribution of Labor Economics," Research Papers in Economics 2015-10, University of Trier, Department of Economics.
    6. repec:rim:rimwps:11-08 is not listed on IDEAS
    7. Joachim Wagner, 2007. "Productivity and Size of the Export Market Evidence for West and East German Plants, 2004," Papers on Entrepreneurship, Growth and Public Policy 2007-13, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    8. Ingrid Ott & Susanne Soretz, 2006. "Nachhaltige Entwicklung durch endogeneUmweltwahrnehmung," Working Paper Series in Economics 24, University of Lüneburg, Institute of Economics.
    9. Uwe Jirjahn & Steffen Mueller, 2014. "Non-union worker representation, foreign owners, and the performance of establishments," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 140-163, January.
    10. Joachim Wagner, 2007. "Jobmotor Mittelstand?: Arbeitsplatzdynamik und Betriebsgröße in der westdeutschen Industrie," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 76(3), pages 76-87.
    11. Uwe Jirjahn, 2013. "Der Beitrag der Arbeitsmarktökonomik zur Erforschung von Gewerkschaften und Tarifvertragsbeziehungen in Deutschland," Research Papers in Economics 2013-03, University of Trier, Department of Economics.
    12. Lena Koller & Claus Schnabel & Joachim Wagner, 2007. "Schwellenwerte im Arbeitsrecht: Höhere Effizienz und Transparent durch Vereinheitlichung," Working Paper Series in Economics 40, University of Lüneburg, Institute of Economics.
    13. Oliver Gürtler & Felix Höffler, 2015. "Monitoring Of Workers And Product Market Competition: The Role Of Works Councils," Economic Inquiry, Western Economic Association International, vol. 53(2), pages 1366-1379, April.
    14. Backes-Gellner Uschi & Mohrenweiser Jens, 2010. "Die Wirkung des Betriebsverfassungsgesetzes am Beispiel der Freistellung von Betriebsräten – ein Beitrag zur Rechtstatsachenforschung / The Effect of the Works Council Act on Paid Leave of Absence of ," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(4), pages 420-435, August.
    15. Grund, Christian & Schmitt, Andreas, 2013. "Works Councils, Quits and Dismissals in Germany," IZA Discussion Papers 7361, Institute for the Study of Labor (IZA).
    16. Jens Mohrenweiser & Uschi Backes-Gellner, 2009. "Die Wirkung des Betriebsverfassungsgesetzes am Beispiel der Freistellung von Betriebsräten – ein Beitrag zur Rechtstatsachenforschung," Working Papers 0104, University of Zurich, Institute for Strategy and Business Economics (ISU).
    17. 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.
    18. Jens Korunig, 2007. "Regulierung des Netzmonopolisten durch Verbot von Peak-load Pricing?," Working Paper Series in Economics 36, University of Lüneburg, Institute of Economics.
    19. Ingrid Ott & Christian Papilloud, 2006. "Converging institutions. Shaping the relationships between nanotechnologies, economy and society," Working Paper Series in Economics 32, University of Lüneburg, Institute of Economics.
    20. Uwe Jirjahn, 2012. "Industrielle Beziehungen und Innovationserfolg," Research Papers in Economics 2012-02, University of Trier, Department of Economics.

    More about this item

    Keywords

    Labor productivity; works councils; quantile regressions; heterogeneous firms;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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