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GEMF

Grupo de Estudos Monetários e Financeiros

Estudos do GEMF, N.º 06 de 2005

  

The Effect of Works Councils on Employment Change

(Publicado em Industrial Relations 45(1): 1-24, 2006)


John T. Addison

University of South Carolina (U.S.A.); GEMF/Universidade de Coimbra (Portugal);
and IZA Bonn (Alemanha)

Paulino Teixeira
Faculdade de Economia and GEMF, Universidade de Coimbra

Abstract:
Despite recent changes in the relationship between unionism and various indicators of firm performance, there is one seeming constant in the Anglophone countries: unions at the workplace are associated with reduced employment growth of around -2.5% a year. Using German data, we examine the impact of the works council – that country’s form of workplace representation – on employment change, 1993-2001. The German institution appears to have much the same negative effect on employment growth. That said, survival bias seems to play a small role, and works councils do not seem to further slow the tortuous pace of employment adjustment in Germany.

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