Separating Introduction Effects from Selectivity Effects: The Differences in Employment Patterns of Codetermined Firms

19 Pages Posted: 8 Feb 2018

See all articles by Rafael Gralla

Rafael Gralla

Technical University of Dortmund

Kornelius Kraft

University of Dortmund - Department of Economics; IZA Institute of Labor Economics

Date Written: March 2018

Abstract

This study examines differences in employment growth between firms with and without works councils by separating introduction effects from potential selectivity effects. Using a difference‐in‐differences framework, we show that firms with works councils have higher employment growth before adopting a works council. However, employment growth declines after introduction. We identify the reason for lower employment growth in reduced hiring rates, while dismissal rates remain constant.

Suggested Citation

Gralla, Rafael and Kraft, Kornelius, Separating Introduction Effects from Selectivity Effects: The Differences in Employment Patterns of Codetermined Firms (March 2018). LABOUR, Vol. 32, Issue 1, pp. 93-111, 2018, Available at SSRN: https://ssrn.com/abstract=3120082 or http://dx.doi.org/10.1111/labr.12121

Rafael Gralla (Contact Author)

Technical University of Dortmund ( email )

Emil-Figge-Straße 50
Dortmund, 44227
Germany

Kornelius Kraft

University of Dortmund - Department of Economics ( email )

D-44221 Dortmund
Germany
+49 231 755-3152 (Phone)
+49 231 755-3155 (Fax)

IZA Institute of Labor Economics

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

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