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The Course of Research into the Economic Consequences of German Works Councils

35 Pages Posted: 16 Oct 2003  

John T. Addison

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

Claus Schnabel

University of Erlangen-Nuremberg; IZA Institute of Labor Economics

Joachim Wagner

University of Lueneburg - Institute of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 2003

Abstract

In a survey published in the British Journal of Industrial Relations, Frege (2002) evaluates research on the German works council from the perspective of several disciplines, including economics. Ultimately, she concludes that economic analysis of the works council has reached a "dead end". The present treatment offers a very different conclusion based on a more encompassing review of the evidence. It will identify three distinct phases in the economic analysis of codetermination at the workplace. This framework is key to understanding the progress that has been made in analysing the effect of works councils on firm performance, while highlighting some important measurement issues and diversity of finding. Given the recent vintage of much of the German research, it is inevitable that Frege considers studies from just the first two phases. Rather interestingly, it is the neglected third phase of research that contains some of the most favourable evaluations to date of Works council impact.

Keywords: works councils, codetermination, quits, productivity, investment, profitability, employee involvement/high performance workplace practices

JEL Classification: J50

Suggested Citation

Addison, John T. and Schnabel, Claus and Wagner, Joachim, The Course of Research into the Economic Consequences of German Works Councils (September 2003). IZA Discussion Paper No. 878. Available at SSRN: https://ssrn.com/abstract=446402

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

Claus Schnabel

University of Erlangen-Nuremberg ( email )

Volkswirtschaftliches Institut
Lange Gasse 20
D-90403 Nuernberg
Germany
+49 911 5302 330 (Phone)
+49 911 5302 721 (Fax)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Joachim Wagner

IZA Institute of Labor Economics

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

University of Lueneburg - Institute of Economics ( email )

PO Box 2440
D-21314 Luneburg
Germany
+49 4131 677 2330 (Phone)
+49 4131 677 2026 (Fax)

HOME PAGE: http://www.uni-lueneburg.de/wifo

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

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