The Effect of Worker Representation on Employment Behavior in Germany: Another Case of -2.5%

29 Pages Posted: 14 Jul 2004

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

Paulino Teixeira

Universidade de Coimbra - Faculdade de Economia; Center for European Economic Research (ZEW)

Date Written: June 2004

Abstract

Despite recent changes in the relationship between unionism and various indicators of firm performance, there is one seeming constant in the Anglophone countries: unions at the workplace are associated with reduced employment growth of around -2.5% a year. Using German data, we examine the impact of the works council - that country's form of workplace representation - on employment change, 1993-2001. Works council plants have 2 to 3 percent lower employment growth having controlled for wages, changes in demand, industry affiliation, various worker and establishment characteristics, and survival bias. That said, works councils do not seem to further slow the tortuous pace of employment adjustment in Germany.

Keywords: unions, works councils, employment change, employment dynamics, survival bias

JEL Classification: J23, J51

Suggested Citation

Addison, John T. and Teixeira, Paulino, The Effect of Worker Representation on Employment Behavior in Germany: Another Case of -2.5% (June 2004). IZA Discussion Paper No. 1188. Available at SSRN: https://ssrn.com/abstract=564562

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

Paulino Teixeira

Universidade de Coimbra - Faculdade de Economia ( email )

Av. Dias da Silva, 165
Coimbra, 3004-512
Portugal

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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