Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/231533
Authors: 
Goerke, Laszlo
Pannenberg, Markus
Year of Publication: 
2021
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research No. 1122
Abstract: 
The German law on co-determination at the plant level (Betriebsverfassungsgesetz) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. This regulation contrasts with publicized instances of excessive payments. The divergence has sparked a debate about the need to reform the law. This paper provides representative evidence on wage payments to works councilors for the period 2001 to 2015. We find wage premia of 2% to 6% in OLS-specifications, which are more pronounced for long-term works councilors. Moreover, we observe no wage premia in linear fixed-effects panel data specifications, suggesting that the OLS-results capture the effect of selection into works councillorship. We obtain no evidence for a delayed compensation or a special treatment of works councilors released from work. Hence, our results indicate that payments to works councilors are broadly in line with legal regulations.
Subjects: 
Labor Law
Wages
Works Councils
Socio-Economic Panel (SOEP)
JEL: 
J30
J51
J53
J83
K31
Document Type: 
Working Paper

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