The Effect of Worker Representation on Employment Behavior in Germany: Another Case of -2.5%

John Addison () and Paulino Teixeira ()

No 1188, IZA Discussion Papers from Institute for the Study of Labor (IZA)

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. Works council plants have 2 to 3 percent lower employment growth having controlled for wages, changes in demand, industry affiliation, various worker and establishment characteristics, and survival bias. That said, works councils do not seem to further slow the tortuous pace of employment adjustment in Germany.

Keywords: unions; works councils; employment change; employment dynamics; survival bias (search for similar items in EconPapers)
JEL-codes: J23 J51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: Written 2004-06
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