Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/21535 
Year of Publication: 
2002
Series/Report no.: 
IZA Discussion Papers No. 422
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
German law guaranteeing works councils is not a datum. The thrust of legislation has changed significantly on a number of occasions since 1920. The most recent legal change in the form of the Works Constitution Reform Act marks a controversial swing in favor of works council formation and authority. The present paper evaluates the new legislation from an economic perspective. We link the crucial terms of the new legislation to extant empirical evidence on the incidence of works councils, the availability of alternative employee involvement mechanisms, and the impact of the institution on performance by establishment size. Given the limitations of the evidence, which are shown to have relaxed the constraints on legislative innovation, we also offer some new empirical findings based on a matched-plants approach, using a nationally representative sample of establishments. This empirical strategy in principle offers improved estimates of the effects of works councils on establishment performance. Although the results of this exercise differ somewhat from earlier analyses, they provide little support for the recent legislative changes.
Subjects: 
works council legislation
codetermination
employee-involvement mechanisms
establishment performance
matched-plants approach
JEL: 
K31
J58
J53
J24
Document Type: 
Working Paper

Files in This Item:
File
Size
400.26 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.