Voice at Work

80 Pages Posted: 15 Mar 2021

See all articles by Jarkko Harju

Jarkko Harju

Government of the Republic of Finland - VATT Institute for Economic Research; CESifo (Center for Economic Studies and Ifo Institute)

Simon Jäger

Massachusetts Institute of Technology (MIT)

Benjamin Schoefer

University of California, Berkeley

Multiple version iconThere are 4 versions of this paper

Date Written: March 2021

Abstract

How does boosting worker voice affect worker separations, job quality, wages, and firm performance? We study the 1991 introduction of a right to worker voice in Finland. The law granted workers in firms with at least 150 employees the right to elect representatives to company boards. The size-dependent introduction permits a difference-in-differences design. In contrast to exit-voice theory, we find no effects on voluntary job separations as a revealed-preference measure of job quality. We can also rule out small increases in the labor share or rent sharing, with some evidence for small pay premia increases, in particular at the bottom of the wage distribution. We detect a small reduction in involuntary separations, zero effects on worker health, and a moderate increase in survey-based subjective job quality. Regarding firm performance, we find, if anything, small positive effects on survival, productivity, and capital intensity. An additional 2008 introduction of shop-floor representation in smaller firms had similar, limited effects. Interviews and surveys indicate that worker representation facilitates information sharing and cooperation rather than shifting power or rents to labor.

Suggested Citation

Harju, Jarkko and Jäger, Simon and Schoefer, Benjamin, Voice at Work (March 2021). Available at SSRN: https://ssrn.com/abstract=3805289

Jarkko Harju (Contact Author)

Government of the Republic of Finland - VATT Institute for Economic Research ( email )

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P.O Box 1279
Helsinki, FIN-00531
Finland

CESifo (Center for Economic Studies and Ifo Institute) ( email )

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Germany

Simon Jäger

Massachusetts Institute of Technology (MIT) ( email )

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Cambridge, MA 02139-4307
United States

Benjamin Schoefer

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

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