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The Dynamic Effects of Works Councils on Labor Productivity: First Evidence from Panel Data

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  • Müller, Steffen
  • Stegmaier, Jens

Abstract

We estimate dynamic effects of works councils on labor productivity using newly available information from West German establishment panel data. Conditioning on plant fixed effects and control variables, we find negative productivity effects during the first five years after council introduction, but a steady and substantial increase in the councils' productivity effect thereafter. Given the frequently reported positive correlation between council existence and plant productivity, this finding supports causal interpretations.

Suggested Citation

  • Müller, Steffen & Stegmaier, Jens, 2015. "The Dynamic Effects of Works Councils on Labor Productivity: First Evidence from Panel Data," IWH Discussion Papers 14/2015, Halle Institute for Economic Research (IWH).
  • Handle: RePEc:zbw:iwhdps:iwh-14-15
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    References listed on IDEAS

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    1. Mueller Steffen, 2008. "Capital Stock Approximation using Firm Level Panel Data: A Modified Perpetual Inventory Approach," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 228(4), pages 357-371, August.
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    6. Jens Stegmaier, 2012. "Effects of Works Councils on Firm-Provided Further Training in Germany," British Journal of Industrial Relations, London School of Economics, vol. 50(4), pages 667-689, December.
    7. 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.
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    Cited by:

    1. Boris Hirsch & Steffen Müller, 2018. "Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany," CESifo Working Paper Series 6890, CESifo Group Munich.
    2. Daniel Arnold & Tobias Brändle & Laszlo Goerke, 2014. "Sickness Absence and Works Councils - Evidence from German Individual and Linked Employer-Employee Data," IAAEU Discussion Papers 201410, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

    More about this item

    Keywords

    non-union worker representation; works council; labor productivity; dynamic effects;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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