Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages

Arbeitspapier

This paper investigates the interaction between establishment-level codetermination and industry-level collective bargaining in Germany. Based on a simple bargaining model we derive our main hypothesis: In establishments covered by collective bargaining agreements works councils are more likely to be engaged in productivity enhancing activities and less engaged in rent seeking activities than their counterparts in uncovered firms. Using data from German manufacturing establishments, our empirical analysis confirms this hypothesis. The presence of works councils exerts a positive impact on productivity within the covered industrial relations regime but not within the uncovered industrial relations regime. In contrast, the presence of works councils has a positive effect on wages within the uncovered industrial relations regime but not to the same degree within the covered industrial relations regime.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 322

Classification and Topics

• Classification: Wirtschaft ; Labor-Management Relations; Industrial Jurisprudence ; Organizational Behavior; Transaction Costs; Property Rights ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials ; Trade Unions: Objectives, Structure, and Effects
• Subject: Dual industrial relations ; bargaining ; efficiency ; rent seeking ; correlated double selection ; Betriebsrat ; Tarifpolitik ; Lohnverhandlungstheorie ; Produktivität ; Rent Seeking ; Lohn ; Schätzung ; Theorie ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hübler, Olaf ; Jirjahn, Uwe
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/21178
• Last update: 10.03.2025, 11:45 AM CET