Voice at Work

Abstract

We estimate the effects of worker voice on productivity, job quality, and separations. We study the 1991 introduction of a right to worker representation on boards or advisory councils in Finnish firms, designed primarily to facilitate workforce-management communication. The reform only affected firms with at least 150 employees, permitting a difference-in-differences design to analyze its causal effects. Consistent with information sharing theories, worker voice slightly raised labor productivity, firm survival, and capital intensity. In contrast to the exit-voice theory, we find no effects on voluntary job separations, and at most small positive effects on other measures of job quality (job security, health, subjective job quality, and wages). A 2008 introduction of shop-floor representation had similarly limited effects.