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Why is there resistance to works councils in Germany? An economic perspective

Steffen Müller and Jens Stegmaier
Authors registered in the RePEc Author Service: Steffen Mueller

No 23/2017, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: Recent empirical research generally finds evidence of positive economic effects of works councils, for example with regard to productivity and - with some limitations - to profits. This makes it necessary to explain why employers' associations have reservations against works councils. On the basis of an in-depth literature analysis, we show that beyond the generally positive findings, there are important heterogeneities in the impact of works councils. We argue that those groups of employers that tend to benefit little from employee participation in terms of productivity and profits may well be important enough to shape the agenda of their employers' organisation and even gained in importance within their organisations in recent years. We also discuss the role of deviations from profit-maximising behaviour like risk aversion, short-term profit maximisation, and other non-pecuniary motives, as possible reasons for employer resistance.

Keywords: employers' association; plant level employee participation; works council (search for similar items in EconPapers)
JEL-codes: J5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hme and nep-lab
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:232017

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