German Works Councils in the Production Process
John Addison (),
Thorsten Schank (),
Claus Schnabel () and
Joachim Wagner ()
No 812, IZA Discussion Papers from Institute of Labor Economics (IZA)
In a sharp break with past German research, some recent estimates have suggested that plants with work councils have 25 to 30 per cent higher productivity than their works-councilfree counterparts. Such findings can only serve to buttress the strong theoretical and policy interest in the German institution, not least in an environment of union decline. In the present paper, we estimate the effects of works councils on productivity, 1997-2000, using a nationally representative German data set. We recoup the works council effect by estimating translog production functions, stochastic frontier production functions, and a model in first differences. Once we focus on a core sample of establishments with 21 to 100 employees in which the powers of the works council are a datum, it emerges that the positive productivity differential is a chimera. By the same token, neither is the effect negative. This result is important in its own right given the sharply opposing findings of past empirical research and the partisan positions these have helped sustain.
Keywords: production functions; works councils; Germany; panel data (search for similar items in EconPapers)
JEL-codes: J50 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed
Published in: Schmollers Jahrbuch: Zeitschrift für Wirtschafts- und Sozialwissenschaften/Journal of Applied Social Science Studies, 2006, 126 (2), 251-283
Downloads: (external link)
Working Paper: German works councils in the production process (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp812
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().