The Effect of Works Councils on Employment Change

John Addison () and Paulino Teixeira ()

No 2005-06, GEMF Working Papers from GEMF - Faculdade de Economia, Universidade de Coimbra

Abstract: Despite recent changes in the relationship between unionism and various indicators of firm performance, there is one seeming constant in the Anglophone countries: unions at the workplace are associated with reduced employment growth of around -2.5% a year. Using German data, we examine the impact of the works council – that country’s form of workplace representation – on employment change, 1993-2001. The German institution appears to have much the same negative effect on employment growth. That said, survival bias seems to play a small role, and works councils do not seem to further slow the tortuous pace of employment adjustment in Germany.

Date: Written 2005
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Published in Industrial Relations, 45(1), 2006, pages 1-24

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