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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

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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