Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/222292
Authors: 
Müller, Steffen
Neuschäffer, Georg
Year of Publication: 
2020
Series/Report no.: 
IWH Discussion Papers 11/2020
Abstract: 
Worker participation in decision-making is often associated with high-wage and high-productivity firm strategies. Using linked-employer-employee data for Germany and worker fixed effects from a two-way fixed effects model of wages capturing observed and unobserved worker quality, we find that establishments with formal worker participation via works councils indeed employ higher-quality workers. We show that worker quality is already higher in plants before council introduction and further increases after the introduction. Importantly, we corroborate previous studies by showing positive productivity and profitability effects even after taking into account worker sorting.
Subjects: 
works councils
worker sorting
worker quality
between-firm wage inequality
productivity
profits
JEL: 
J5
J24
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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