Labor in the Boardroom

Abstract

We estimate the wage effects of shared governance, or codetermination, in the form of a mandate of one third of corporate board seats going to worker representatives. We study a reformin Germany that abruptly abolished this mandate for stock corporations incorporated after August 1994, while it locked the mandate for the slightly older cohorts. Our research design compares firm cohorts incorporated before the reform and after; in a robustness check we additionally draw on the analogous difference in unaffected firm types (LLCs). We find no effects of board-level codetermination on wages and the wage structure, even in firms with particularly flexible wages. The degree of rent sharing and the labor share are also unaffected. We reject that disinvestment could have offset wage effects through the canonical hold-up channel, as shared governance, if anything, increases capital formation.

The Equilibrium and Spillover Effects of Early Retirement

“…Of course, other attributes also vary with establishment size so our analysis of worker codetermination and establishment size does not definitively pin down only variation in codetermination. See Jäger and Schoefer (2019) for more evidence on the effects of codetermination in the related context of Germany. 1981) and Bewley (2002) and potentially consistent with our alternative non-Coasean framework described in Section 5.…”

Doing global investments the Nordic way

“…In the German context, workers' representation on boards is referred to as "shared governance" or "codetermination" (Jäger et al 2019). Robert Schols and Sigurt Vitols found that in Germany, union representation on boards pos-itively aligns with substantive CSR, like "emissions reduction, the publication of a CSR report and commitment to employment security, " but not with symbolic CSR, like being a signatory to the UN Global Compact (Scholz and Vitols 2019: 244).…”

What Do Americans Want From (Private) Government? Experimental Evidence Demonstrates that Americans Want Workplace Democracy

“…While one might suggest that these sorts of firms that make power distribution more equitable among workers and management might generate efficiency costs, existing evidence suggests that, if anything, more democratically structured firms are often times more productive than their less democratic counter-parts (Blasi, Freeman, and Kruse 2014;Jager, Schoefer, and Heining 2019). If these firms are not less efficient than their less democratic counterparts (private corporations for instance), then is it the case that we don't observe workplace democratization because Americans simply don't want to work at these types of firms?…”

“…For sociological work, seeFligstein (1993),Davis and Thompson (1994),Davis and Greve (1997),Kang and Sorenson (1999), andGoldstein (2012). For economics work, seeHart and Moore (1990),Rajan and Zingales (1998),La Porta, Lopez-de-Silanes, and Shleifer (1999),La Porta et al (2000),Rajan and Zingales (2002),Gompers, Ishii, and Metrick (2003),Pagano and Volpin (2005),Blasi, Freeman, and Kruse (2014),Azar, Schmalz, and Tecu (2018),Jager, Schoefer, and Heining (2019),and Ederer, Cunningham, and Ma (Forthcoming). For an exception to this in political science, seeCioffi and Hopner (2006),Ciepley (2013Ciepley ( , 2017, Hertel-Fernandez (2018), and Hertel-Fernandez, Kimball, and Kochan (2019) for instance.…”