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The reform of the German works constitution act: a critical assessment

  • Addison, John T.
  • Bellmann, Lutz
  • Schnabel, Claus
  • Wagner, Joachim

Since 1920, the thrust of German law on workplace codetermination has changed on a number of occasions. We describe the latest swing of the legislative pendium - favoring works council formation and competence - and evaluate the case for it. We provide new information on the extent of works councils before reviewing the evidence on their economic effects, focusing on some new results from matched-plant data. If the former evidence points to a codetermination deficit, this shortfall does not appear to have negative consequences for workplace productivity, profitability, and employment.

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Paper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 16.

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Date of creation: 2002
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Handle: RePEc:zbw:faulre:16
Contact details of provider: Web page: http://www.arbeitsmarkt.wiso.uni-erlangen.de/english-version/
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  1. Michael Lechner, 2002. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 165(1), pages 59-82.
  2. Schank, Thorsten & Schnabel, Claus & Wagner, Joachim, 2002. "Works Councils – Sand or Grease in the Operation of German Firms?," IZA Discussion Papers 648, Institute for the Study of Labor (IZA).
  3. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
  4. FitzRoy, Felix R & Kraft, Kornelius, 1985. "Unionization, Wages and Efficiency: Theories and Evidence from the U.S. and West Germany," Kyklos, Wiley Blackwell, vol. 38(4), pages 537-54.
  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. Addison, John T. & Schnabel, Claus & Wagner, Joachim, 2000. "Die mitbestimmungsfreie Zone aus ökonomischer Sicht," Discussion Papers 1, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  7. Barbara Sianesi, 2001. "Propensity score matching," United Kingdom Stata Users' Group Meetings 2001 12, Stata Users Group, revised 23 Aug 2001.
  8. Addison, John T & Schnabel, Claus & Wagner, Joachim, 1996. "German Works Councils, Profits, and Innovation," Kyklos, Wiley Blackwell, vol. 49(4), pages 555-82.
  9. Fitzroy, Felix R & Kraft, Kornelius, 1987. "Efficiency and Internal Organization: Works Councils in West German Firms," Economica, London School of Economics and Political Science, vol. 54(216), pages 493-504, November.
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