Higher Wages, Overstaffing or Both? The Employer's Assessment of Problems Regarding Wage Costs and Staff Level in Co-Determined Establishments

Rafael Gralla (rafael.gralla@tu-dortmund.de) and Kornelius Kraft
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Rafael Gralla: TU Dortmund

No 7021, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study examines the differences in the likelihood of overpayment and overemployment in establishments with and without works councils. In contrast to other studies, we use assessments by the management concerning the existence of such problems. Furthermore, we also analyze how different types of works councils influence the probability of overemployment and overpayment. Using the wave 2006 of the IAB Establishment Panel, we show that establishments with works councils that are prepared to interfere with the management are more likely to suffer from overemployment but do not differ in the likelihood of overpayment compared to establishments without works councils. Establishments with works councils that are in line with the management, however, do not differ from establishments without a works council with regard to the likelihood of overemployment but have a lower likelihood of overpayment.

Keywords: works councils; wages; employment (search for similar items in EconPapers)
JEL-codes: J23 J31 J53 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2012-11
New Economics Papers: this item is included in nep-lab and nep-lma
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Citations: View citations in EconPapers (2)

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