The Causes and Consequences of Adopting a Works Council

Kraft, Kornelius; Lang, Julia

doi:10.1515/9783110511680-007

Cited by 8 publications

(19 citation statements)

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“…A common feature of the studies mentioned above is that they ignore the potential endogeneity of the introduction of a works council. Jirjahn (2009) as well as Kraft and Lang (2008) found that employees prefer to introduce works councils to secure their rents.…”

Section: Endogeneity Of Work Councilsmentioning

confidence: 99%

“…A common feature of the studies mentioned above is that they ignore the potential endogeneity of the introduction of a works council. Jirjahn () as well as Kraft and Lang () found that employees prefer to introduce works councils to secure their rents. Additionally, Kraft and Lang () showed that employees prefer to introduce a works council if they are worried about potential job losses.…”

Section: Related Literaturementioning

confidence: 99%

“…Jirjahn () as well as Kraft and Lang () found that employees prefer to introduce works councils to secure their rents. Additionally, Kraft and Lang () showed that employees prefer to introduce a works council if they are worried about potential job losses. The adoption of a works council in turn is associated with fewer worries about becoming unemployed.…”

Section: Related Literaturementioning

confidence: 99%

“…5 An alternative explanation for the simultaneous observation of the introduction of a works council and lower employment growth rate is the following: As stated above, works councils are of particular help for employees if redundancies take place. Iffor exogenous reasonsthe economic conditions of a firm deteriorate, the workforce might decide to adopt a works council in order to be better prepared for possible negotiations about the conditions and extent of dismissals (Jirjahn, 2009;Kraft and Lang, 2008). Thus, works councils may be the result of pessimistic expectations about the future.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

See 3 more Smart Citations

Separating Introduction Effects from Selectivity Effects: The Differences in Employment Patterns of Codetermined Firms

Gralla

Kraft

2018

Labour

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This study examines differences in employment growth between firms with and without works councils by separating introduction effects from potential selectivity effects. Using a difference‐in‐differences framework, we show that firms with works councils have higher employment growth before adopting a works council. However, employment growth declines after introduction. We identify the reason for lower employment growth in reduced hiring rates, while dismissal rates remain constant.

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Section: Endogeneity Of Work Councilsmentioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

Section: Theoretical Backgroundmentioning

confidence: 99%

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Separating Introduction Effects from Selectivity Effects: The Differences in Employment Patterns of Codetermined Firms

Gralla

Kraft

2018

Labour

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“…26 For a discussion, seeJirjahn (2009). Further evidence supporting the hypothesis of a higher probability of council introduction in times of bad firm performance is found inAddison, Bryson, Teixeira, Pahnke, and Bellmann (2009) andKraft and Lang (2008).…”

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confidence: 89%

Works Councils and Establishment Productivity

Mueller¹

2012

ILR Review

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Declining union density in many industrialized countries increases interest in alternative forms of employee representation, such as works councils. The German works council is one of the most powerful forms of worker representation in developed countries, but little is known of its causal effect on productivity. The author used a large linked employer-employee panel data set to examine this issue. Comparing firms with and without a works council, the author finds that establishments with a works council are on average 6.4% more productive; but he also presents evidence that this figure underestimates the true productivity effect of works councils.

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Worker Participation in Decision‐making, Worker Sorting, and Firm Performance

Mueller¹,

Neuschaeffer²

2021

Industrial Relations

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Worker participation in decision‐making is often associated with high‐wage and high‐productivity firm strategies. Using linked employer–employee data for Germany and worker fixed effects from a two‐way fixed‐effects model of wages capturing observed and unobserved worker quality, we find that plants with formal worker participation via works councils indeed employ higher quality workers. We show that worker quality is already higher in plants before council introduction and further increases after the introduction. Importantly, we corroborate previous studies by showing positive productivity and profitability effects even after taking into account worker sorting.

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The Causes and Consequences of Adopting a Works Council

Cited by 8 publications

References 0 publications

Separating Introduction Effects from Selectivity Effects: The Differences in Employment Patterns of Codetermined Firms

Separating Introduction Effects from Selectivity Effects: The Differences in Employment Patterns of Codetermined Firms

Works Councils and Establishment Productivity

Worker Participation in Decision‐making, Worker Sorting, and Firm Performance

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