Minority representation at work

Matthias Breuer, Wei Cai, Anthony Le and Felix Vetter

No 343, Working Papers from The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State

Abstract: Recent proposals for a more inclusive capitalism call for labor and minority representation in corporate governance. We examine the joint promise of labor and minority representation in the context of German works councils. The councils are a powerful form of labor representation that grants elected delegates of shop-floor workers codetermination rights (e.g., over work conditions). Since 2001, a quota ensures that elected delegates include delegates of the minority gender in the workforce. Using detailed survey and administrative data, we find that required minority representation helps the representation of the minority gender on works councils, elevates the effort of works councils, and boosts job satisfaction and well-being of workers, irrespective of their gender. At the establishment level, we find that required minority representation reduces worker turnover and increases investment and productivity. Our findings suggest that laws ensuring labor and minority representation in corporate governance can work (i.e., benefit workers without necessarily hurting employers). The seemingly beneficial impact of the laws suggests that frictions hamper the representation of minorities and cooperation among workers and employers.

Keywords: Corporate Governance; Labor Representation; Gender Quota; Job Satisfaction (search for similar items in EconPapers)
JEL-codes: J15 J16 J28 J53 J54 J63 J71 J81 J82 J83 K22 K31 M12 M14 M50 M54 P16 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-hrm, nep-lab and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cbscwp:294850

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