An Economic Analysis of Works Councils
Works councils, found in most Western European economies, are elected bodies of employees with rights to information, consultation, and in some cases co-determination of employment conditions at local workplaces, mandated by law. Many European employers and unions believe that councils improve communication between workers and management, raising social output, while reducing the speed with which decisions are made. This paper analyzes the operation of councils as a means of improving social output by creating more cooperative labor relations. It argues that councils are mandated because the incentive for companies to institute them and delegate them power falls short of the social incentive; that workers provide more accurate information to employers about preferences when councils have some say over how that information is used; and that the communication from employers to workers produces socially desirable worker concessions in bad times that would not occur absent this institution. It compares a jury style random selection of works councilors with selection via elections.
|Date of creation:||Nov 1994|
|Publication status:||published as "An Economic Analysis of Works Councils." Works Councils: Consultation, Representation and Cooperation in Industrial Relations University of Chicago Press, 1996. Eds. Joel Rogers and Wolfgang Streeck.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Morris M. Kleiner & Marvin L. Bouillon, 1988. "Providing Business Information to Production Workers: Correlates of Compensation and Profitability," ILR Review, Cornell University, ILR School, vol. 41(4), pages 605-617, July.
- Hall, Robert E & Lazear, Edward P, 1984.
"The Excess Sensitivity of Layoffs and Quits to Demand,"
Journal of Labor Economics,
University of Chicago Press, vol. 2(2), pages 233-257, April.
- Robert E. Hall & Edward P. Lazear, 1982. "The Excess Sensitivity of Layoffs and Quits to Demand," NBER Working Papers 0864, National Bureau of Economic Research, Inc.
- Masahiko Aoki, 2013. "Horizontal vs. Vertical Information Structure of the Firm," Chapters, in: Comparative Institutional Analysis, chapter 5, pages 57-58 Edward Elgar Publishing.
- Aoki, Masahiko, 1986. "Horizontal vs. Vertical Information Structure of the Firm," American Economic Review, American Economic Association, vol. 76(5), pages 971-983, December.
- Kennan, John, 1979. "Bonding and the enforcement of labor contracts," Economics Letters, Elsevier, vol. 3(1), pages 61-66.
- Tirole, Jean, 1986. "Hierarchies and Bureaucracies: On the Role of Collusion in Organizations," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 181-214, Fall.
- Motohiro Morishima, 1991. "Information Sharing and Collective Bargaining in Japan: Effects on Wage Negotiation," ILR Review, Cornell University, ILR School, vol. 44(3), pages 469-485, April. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4918. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.