The Role of Works Councils for Severance Payments
22 Pages Posted: 8 May 2017
Using representative German employee data, we analyse the role of works councils for the incidence of severance payments subsequent to dismissals. While there is a positive relation with severance payments after those dismissals which stem from plant closings, the incidence of a works council is negatively associated with severance pay subsequent to individual layoffs. In both cases, we find a negative moderating effect of individuals' higher reemployment chances. We also explore gender differences and differences between the types of previously held jobs.
Keywords: dismissals, layoffs, plant closings, severance pay, works councils
JEL Classification: J53, J63, J65
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