Unions, Works Councils and Plant Closings in Germany

32 Pages Posted: 19 May 2002

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

Lutz Bellmann

Institute for Employment Research (IAB); Institute for the Study of Labor (IZA)

Arnd Kölling

Berlin School of Economics and Law

Date Written: April 2002

Abstract

This paper present paper provides the first results for Germany on the impact of works councils and collective agreements on plant closings, using data from the IAB establishment panel. We find evidence of a robust positive association between works council presence and plant closures. The strictures of collective agreements do not seemingly affect closings. By the same token, and contrary to some recent findings on other aspects of establishment performance, the presence of a collective agreement does not attenuate the impact of local workplace representation on closings. Our analysis does nothing to encourage a sanguine view of recent legislation in Germany that facilitates the formation of works councils and strengthens their codetermination powers.

Keywords: Rent Seeking, Workplace Representation, Industry/Regional Collective Bargaining, Codetermination, Plant Closings

JEL Classification: J51, J53, J58, J65

Suggested Citation

Addison, John T. and Bellmann, Lutz and Kölling, Arnd, Unions, Works Councils and Plant Closings in Germany (April 2002). IZA Discussion Paper No. 474. Available at SSRN: https://ssrn.com/abstract=310355

John T. Addison (Contact Author)

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-7400 (Phone)
803-777-6876 (Fax)

HOME PAGE: http://mooreschool.sc.edu/moore/economics/profiles/addison.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Lutz Bellmann

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany
+49 911 179 3046 (Phone)
+49 911 179 3297 (Fax)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Arnd Kölling

Berlin School of Economics and Law ( email )

Alt-Friedrichsfelde 60
Berlin, D-10315
Germany

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