Works councils, quits and dismissals in Germany

Grund, Christian; Martin, Johannes; Schmitt, Andreas B.

doi:10.1177/2397002215625894

Cited by 14 publications

(13 citation statements)

References 42 publications

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“…The treatment effect in 2004 is insignificant in all specifications, which provides evidence for a merely temporary effect on voluntary quits. A similar result is described by Grund et al (2016), who find that the formation of works councils initially increases job satisfaction, but this effect vanishes within not more than five years after formation. 21 If the dependent variable is the quit ratio instead of the number of quits, 22 the results are fairly similar: the treatment reduces the quit ratio by 0.3 percentage points, which corresponds to a reduction of about 25 percent in the mean quit rate of 1.3 percent in the group of treated establishments.…”

Section: Resultssupporting

confidence: 83%

“…Nevertheless, even for an unusually high quit rate of up to 10 percent, the effect appears to be substantial in magnitude. Using data from the Socio-economic Panel, Grund et al (2016) find that works councils are associated with a 1.2 percentage point lower quit rate, which corresponds to a 27 percent difference in voluntary quits between establishments with and without a works council, respectively. Pfeifer (2007) reports that the existence of a works council is associated with 20 percent fewer voluntary quits, whereas the difference is 30 percent when works councils and collective agreements co-exist.…”

Section: Effects Of Work Councils On Quits: Theory and Evidencementioning

confidence: 99%

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Voluntary Quits: Do Works Councils Matter? An Analysis of the Reform of the German Works Constitution Act 2001

Adam

2019

Jahrbücher Für Nationalökonomie Und Statistik

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Most of the literature on the effects of German works councils does not deal with the issue of potential endogeneity of works council existence. Exploiting exogenous variation in works council authority stemming from a 2001 reform of the German Works Constitution Act, I apply a regression difference-in-difference using establishment panel data. I find that increasing works council size and the introduction of one full-time councilor causally reduces the number of voluntary quits by about 30 %. This decline is driven entirely by collective voice effects and there is no evidence for monopoly effects in place. Similar to the findings of previous research, the effect is significant only in establishments which are subject to a collective agreement. The results suggest that the effectiveness of works councils either heavily relies on the support of unions, or that works councils mainly serve as a guardian of collective agreements.

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Section: Resultssupporting

confidence: 83%

Section: Effects Of Work Councils On Quits: Theory and Evidencementioning

confidence: 99%

Voluntary Quits: Do Works Councils Matter? An Analysis of the Reform of the German Works Constitution Act 2001

Adam

2019

Jahrbücher Für Nationalökonomie Und Statistik

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“…Using plant‐level data, Frick (1996) finds that works council existence is related to fewer quits and, among others, Addison et al. (2001), Frick and Möller (2003), Pfeifer (2011) and Grund, Martin and Schmitt (2016) confirm that turnover is reduced. Whether these are indeed direct “collective voice” effects or whether they are rather rent‐seeking effects is analyzed by Hirsch et al.…”

Section: Institutional Setting Theory and Some Literaturementioning

confidence: 95%

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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“…Works councils also reduce personnel turnover (Frick and Moeller , Grund et al. , Pfeifer ), foster internal labor markets (Heywood et al. , Zwick ) and help avoid labor shortages (Backes‐Gellner and Tuor ).…”

Section: The German Experience With Work Councilsmentioning

confidence: 99%

Nonunion Employee Representation: Theory and the German Experience With Mandated Works Councils

Jirjahn

Smith

2018

Ann Public Coop Econ

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Works councils, quits and dismissals in Germany

Cited by 14 publications

References 42 publications

Voluntary Quits: Do Works Councils Matter? An Analysis of the Reform of the German Works Constitution Act 2001

Voluntary Quits: Do Works Councils Matter? An Analysis of the Reform of the German Works Constitution Act 2001

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

Nonunion Employee Representation: Theory and the German Experience With Mandated Works Councils

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