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What Does Codetermination Do?

Author

Listed:
  • Simon Jäger
  • Shakked Noy
  • Benjamin Schoefer
Abstract
The authors provide a comprehensive overview of codetermination, that is, worker representation in firms’ governance and management. The available micro evidence points to zero or small positive effects of codetermination on worker and firm outcomes and leaves room for moderate positive effects on productivity, wages, and job stability. The authors also present new country-level, general-equilibrium event studies of codetermination reforms between the 1960s and 2010s, finding no effects on aggregate economic outcomes or the quality of industrial relations. They offer three explanations for the institution’s limited impact. First, existing codetermination laws convey little authority to workers. Second, countries with codetermination laws have high baseline levels of informal worker voice. Third, codetermination laws may interact with other labor market institutions, such as union representation and collective bargaining. The article closes with a discussion of the implications for recent codetermination proposals in the United States.

Suggested Citation

  • Simon Jäger & Shakked Noy & Benjamin Schoefer, 2022. "What Does Codetermination Do?," ILR Review, Cornell University, ILR School, vol. 75(4), pages 857-890, August.
    • Handle: RePEc:sae:ilrrev:v:75:y:2022:i:4:p:857-890
    DOI: 10.1177/00197939211065727
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    Full references (including those not matched with items on IDEAS)

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    2. Biancardi, Daniele & Lucifora, Claudio & Origo, Federica, 2022. "Short-time work and unionization," Labour Economics, Elsevier, vol. 78(C).
    3. Pierre Bachas & Matthew Fisher-Post & Anders Jensen & Gabriel Zucman, 2022. "Globalization and Factor Income Taxation," World Inequality Lab Working Papers halshs-03693211, HAL.
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    6. Schultheiss, Tobias & Pfister, Curdin & Gnehm, Ann-Sophie & Backes-Gellner, Uschi, 2023. "Education expansion and high-skill job opportunities for workers: Does a rising tide lift all boats?," Labour Economics, Elsevier, vol. 82(C).
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    More about this item

    Keywords

    codetermination; works councils; corporate governance; worker voice; labor market;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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