The Heterogeneous Economic Consequences Of Works Council Relations
The author uses a question about works council relations from the 2006 wave of the IAB Establishment panel to analyze the heterogeneous effects of works councils on productivity, wages, and profits. The results indicate that the effects differ significantly between works council relationship types in a systematic pattern. The overall findings are in line with productivity-enhancing and rent-sharing functions of works councils. In the last two decades, many empirical studies have been conducted that analyze the economic consequences of works councils in German firms (for detailed literature reviews see Frege (2002), Addison, Schnabel and Wagner (2001; 2004), Jirjahn (2005; 2006), and articles by Jirjahn (2011) and Mueller (2011) in this special issue).