Wage determination in the shadow of the law: The case of works councilors in Germany

Laszlo Goerke and Markus Pannenberg
Additional contact information
Markus Pannenberg: Department of Business and Economics, University of Applied Sciences, Bielefeld, Germany; IZA, Bonn, Germany; GLO

Economic and Industrial Democracy, 2024, vol. 45, issue 1, 83-115

Abstract: The German law on co-determination at the plant level ( Betriebsverfassungsgesetz ) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. However, lavish payments to works councilors in some large firms have generated a debate about the need to reform the law. This article offers an empirical basis for the discussion and provides representative evidence on wage payments to works councilors for the period 2001–2015. The authors find wage premia of 3–7% in OLS specifications, but observe no wage differentials in linear fixed-effects panel data specifications. Similar results are found for various subgroups of employees and when focusing on employees in particular types of firms. Hence, the results indicate that payments to works councilors are broadly in line with legal regulations.

Keywords: Co-determination; labor law; Socio-Economic Panel (SOEP); wages; works councils (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0143831X221139331 (text/html)

Related works:
Working Paper: Wage Determination in the Shadow of the Law: The Case of Works Councilors in Germany (2021)
Working Paper: Wage Determination in the Shadow of the Law: The Case of Works Councilors in Germany (2021)
Working Paper: Wage Determination in the Shadow of the Law: The Case of Works Councilors in Germany (2021)
Working Paper: Wage Determination in the Shadow of the Law: The Case of Works Councilors in Germany (2021)
Working Paper: Wage Determination in the Shadow of the Law: The Case of Works Councilors in Germany (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:ecoind:v:45:y:2024:i:1:p:83-115

DOI: 10.1177/0143831X221139331

Access Statistics for this article

More articles in Economic and Industrial Democracy from Department of Economic History, Uppsala University, Sweden
Bibliographic data for series maintained by SAGE Publications ().