Works Councils, Collective Bargaining, and Apprenticeship Training – Evidence From German Firms

Ben Kriechel, Samuel Muehlemann, Harald Pfeifer and Miriam Schütte

Industrial Relations: A Journal of Economy and Society, 2014, vol. 53, issue 2, 199-222

Abstract: type="main" xml:id="irel12061-abs-0001">

In this paper, we investigate the effects of works councils on apprenticeship training in Germany. The German law attributes works councils substantial information and co-determination rights to training-related issues. Thus, works councils may also have an impact on the cost-benefit relation of workplace training. Using detailed firm-level data containing information on the costs and benefits of apprenticeship training, we find that firms with works councils make a significantly higher net investment in training compared to firms without such an institution. We also find that the fraction of former trainees still employed with the same firm 5 years after training is significantly higher in the presence of works councils, thus enabling firms to recoup training investments over a longer time horizon. Furthermore, all works council effects are much more pronounced for firms covered by collective bargaining agreements.

Date: 2014
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