Labor in the Boardroom

Simon Jäger, Benjamin Schoefer and Jörg Heining

No 26519, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the wage effects of shared governance, or codetermination, in the form of a mandate of one third of corporate board seats going to worker representatives. We study a reformin Germany that abruptly abolished this mandate for stock corporations incorporated after August 1994, while it locked the mandate for the slightly older cohorts. Our research design compares firm cohorts incorporated before the reform and after; in a robustness check we additionally draw on the analogous difference in unaffected firm types (LLCs). We find no effects of board-level codetermination on wages and the wage structure, even in firms with particularly flexible wages. The degree of rent sharing and the labor share are also unaffected. We reject that disinvestment could have offset wage effects through the canonical hold-up channel, as shared governance, if anything, increases capital formation.

JEL-codes: G3 J0 J3 J53 J54 K31 M12 M5 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-law and nep-ore
Note: CF EFG LE LS POL PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published as Simon Jäger & Benjamin Schoefer & Jörg Heining, 2021. "Labor in the Boardroom*," The Quarterly Journal of Economics, vol 136(2), pages 669-725.

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Related works:
Journal Article: Labor in the Boardroom* (2021)
Working Paper: Labor in the boardroom (2020)
Working Paper: Labor in the Boardroom (2019)
Working Paper: Labor in the Boardroom (2019)
Working Paper: Labor in the Boardroom (2019)
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