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Works council introductions: Do they reflect workers' voice?

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  • Oberfichtner, Michael
Abstract
Using a large linked employer-employee dataset from Germany, the author investigates workers' decision to introduce a works council as an exit-voice consideration. Thereby, the author explores the collective voice face of introductions, while previous studies focus on the monopoly aspect. Controlling for unobserved plant heterogeneity, council introductions are more likely if workers have high plant-specific human capital or earn high wages, whereas no association between the labor market situation and introductions shows up. The findings on human capital and wages are consistent with the idea that workers trade off introducing a council against exit as well as with workers trying to protect an existing distribution of rents. Redoing the analysis for a sample of plants in which it is less relevant for workers to protect themselves against management decisions yields similar results supporting the voice interpretation.

Suggested Citation

  • Oberfichtner, Michael, 2013. "Works council introductions: Do they reflect workers' voice?," Discussion Papers 83, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    • Handle: RePEc:zbw:faulre:83
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    References listed on IDEAS

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    Cited by:

    1. Uwe Jirjahn & Jens Mohrenweiser, 2016. "Owner-Managers and the Failure of Newly Adopted Works Councils," British Journal of Industrial Relations, London School of Economics, vol. 54(4), pages 815-845, December.
    2. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    3. Oberfichtner, Michael, 2013. "Works council introductions: Do they reflect workers' voice?," Discussion Papers 83, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    4. Hirsch, Boris & Merkl, Christian & Müller, Steffen & Schnabel, Claus, 2014. "Centralized vs. decentralized wage formation: The role of firms' production technology," Kiel Working Papers 1927, Kiel Institute for the World Economy (IfW Kiel).
    5. Steffen Mueller & Jens Stegmaier, 2017. "The Dynamic Effects of Works Councils on Labour Productivity: First Evidence from Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 372-395, June.
    6. Jirjahn, Uwe & Mohrenweiser, Jens, 2013. "Active owners and the failure of newly adopted works councils," ZEW Discussion Papers 13-080, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    co-determination; works councils; works council introductions; workers' voice;
    All these keywords.

    JEL classification:

    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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