Councils of Contentment: Works Councils and Income Perceptions

Laszlo Goerke, Sven A. Hartmann () and Yue Huang ()
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Sven A. Hartmann: Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University
Yue Huang: Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University

No 202602, IAAEU Discussion Papers from Institute of Labour Law and Industrial Relations in the European Union (IAAEU)

Abstract: Using data from the German Socio-Economic Panel, we provide a comprehensive investigation of the relationship between workplace co-determination in the form of works councils and income satisfaction. Controlling for a wide range of individual, job-related, and firm-level characteristics in OLS and fixed effects specifications, we observe that employees working in establishments with a works council report significantly higher income satisfaction compared to their counterparts in non-co- determined firms. The rank in the income distribution, the perceived fairness of the wage, and working conditions emerge as quantitatively relevant factors in explaining the positive correlation.

Keywords: Co-determination; income satisfaction; SOEP (search for similar items in EconPapers)
JEL-codes: I31 J28 J50 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2026-03
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Persistent link: https://EconPapers.repec.org/RePEc:iaa:dpaper:202602

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