Works Councils, Labor Productivity and Plant Heterogeneity: Evidence from Quantile Regressions

19 Pages Posted: 1 Dec 2004

See all articles by Joachim Wagner

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

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

Thorsten Schank

University of Erlangen-Nuremberg

Date Written: November 2004

Abstract

Using quantile regressions and a rich cross section data set for German manufacturing plants, this paper reports that the impact of works councils on labor productivity varies along the conditional distribution of value added per employee. It emerges that the positive and statistically significant effect of works council presence estimated by ordinary least squares now vanishes for large parts of this distribution. According to our results, such an effect can only be detected in plants at the top end of the conditional productivity distribution - plants that can be considered 'over achievers.' We would speculate that this might be because only highly competent managers can cooperate with a works council in a way that much enhances productivity.

Keywords: labor productivity, works councils, quantile regressions, heterogeneous firms

JEL Classification: J50

Suggested Citation

Wagner, Joachim and Addison, John T. and Schnabel, Claus and Schank, Thorsten, Works Councils, Labor Productivity and Plant Heterogeneity: Evidence from Quantile Regressions (November 2004). IZA Discussion Paper No. 1414. Available at SSRN: https://ssrn.com/abstract=628003

Joachim Wagner (Contact Author)

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 )

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IZA Institute of Labor Economics

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

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
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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 )

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

HOME PAGE: http://https://www.arbeitsmarkt.rw.fau.de/english-version/staff/prof-dr-claus-schnabel/

IZA Institute of Labor Economics

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

Thorsten Schank

University of Erlangen-Nuremberg ( email )

Schloßplatz 4
Erlangen, Bavaria 91054
Germany

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