The Causes and Consequences of Adopting a Works Council

Kraft, Kornelius; Lang, Julia

doi:10.1515/jbnst-2008-5-607

“…Regarding the remaining control variables, we consider measures that are quite standard in the literature on performance effects of works councils or other forms of employee participation (e.g., Addison et al 2001, Addison et al 2006, Zwick 2004, Kraft and Lang 2008. For example, the influence of an establishment's activities abroad is captured by the export share.…”

Section: Estimation Resultsmentioning

confidence: 99%

“…However, according to the related literature it is not unusual to apply profitability measures as an indicator of rent seeking. For example, Kraft and Lang (2008) and Jirjahn (2009) use the subjective evaluations made by establishment representatives of establishment profitability to construct a rent-seeking indicator. Furthermore, Beckmann et al (2010) use value added, value added per capita, value added minus wages, and value added minus wages per capita as alternative rent-seeking measures.…”

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confidence: 99%

“…29 For example, Kraft and Lang (2008) and Jirjahn (2009) also use variables on employment changes as potential determinants of works council adoption. While Jirjahn (2009) examines the impact of employment growth on works council introduction, Kraft and Lang (2008) specify two dummy variables capturing future employment expectations and estimate their influence on works council introduction.…”

mentioning

confidence: 99%

“…While Jirjahn (2009) examines the impact of employment growth on works council introduction, Kraft and Lang (2008) specify two dummy variables capturing future employment expectations and estimate their influence on works council introduction.…”

mentioning

confidence: 99%

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Internal rent seeking, works councils, and optimal establishment size

Beckmann

¹

,

Kräkel

²

2012

European Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractUsing a microeconomic model and data from the Establishment Panel of the German Institute for Employment Research, we analyze the optimal establishment size against the background of rent-seeking workers and the influence of works councils. The theoretical part shows that establishment size has a discouragement effect on the level of individual rent seeking but also a quantity effect as the number of rent seekers increases. The interplay of both effects -together with technological considerations -determines whether the employer chooses an inefficiently small or large establishment size. Introduction of a works council restores efficient establishment size although it is purely used as rent-seeking device. Whether the employer benefits from a works council or not, depends on the degree of contract incompleteness and the degree of worker coordination via a works council. The empirical part indicates dominance of the discouragement effect over the quantity effect in establishments without works council. As theoretically predicted, works councils are beneficial by disentangling rent-seeking and production issues, thus eliminating the influence of the two rent-seeking effects.

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“…Theoretical models stress that organizations of worker representation protect workers' interest by monitoring the employer (Askildsen et al 2006, Freeman and Lazear 1995, Smith 1991 and punishing employer opportunism (Hogan 2001). Empirical research confirms that works councils are more likely to be introduced by the workforce if the employer has a strong incentive to behave opportunistically (Jirjahn 2009, Kraft and Lang 2008, Mohrenweiser et al 2011. There is also evidence that works councils play a specific role in sustaining cooperation and performance in such a situation (Jirjahn 2011, Stettes 2010 Findings by Jirjahn and Smith (2006) suggest that those establishments are more likely to use forms of direct worker participation in order to build cooperative industrial relations.…”

Section: Work Councilsmentioning

confidence: 99%

Reciprocity and Workers’ Tastes for Representation

Jirjahn

¹

,

Lange²

2011

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in SOEPpapers on Multidisciplinary Panel Data Research at DIW BerlinThis series presents research findings based either directly on data from the German SocioEconomic Panel Study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences: economics, sociology, psychology, survey methodology, econometrics and applied statistics, educational science, political science, public health, behavioral genetics, demography, geography, and sport science.The decision to publish a submission in SOEPpapers is made by a board of editors chosen by the DIW Berlin to represent the wide range of disciplines covered by SOEP. There is no external referee process and papers are either accepted or rejected without revision. Papers appear in this series as works in progress and may also appear elsewhere. They often represent preliminary studies and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be requested from the author directly.Any opinions expressed in this series are those of the author(s) and not those of DIW Berlin.Research disseminated by DIW Berlin may include views on public policy issues, but the institute itself takes no institutional policy positions. Abstract: Using unique survey data from the German Socio-Economic Panel, this study examines the influence of reciprocal inclinations on workers' sorting into codetermined firms. Employees with strong negative reciprocal inclinations are more likely to work in firms with a works council while employees with strong positive reciprocal inclinations are less likely to work in such firms. We argue that these findings conform to hypotheses derived from the experimental literature. Moreover, the results show striking gender differences in the relationship between reciprocity and taste for representation. These differences can be partially explained by gender-specific differences in the average degree of labor force attachment.JEL: D03, J52, J53, M50.

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