Recent studies on the economic effects of works councils in Germany using the European Company Survey estimate a significant negative effect of works councils on establishment productivity and profitability. These results are in stark contrast to studies using the IAB Establishment Panel...

Empirical studies find that firms with employee representation have a higher productivity than firms without employee representation. The exact mechanisms for this consistent finding remain unclear, however. A frequent theoretical argument postulates that employee representation provides a...

This chapter reviews the economic effects of employee representation with statutory consultation and information rights at the workplace, the works councils. The chapter summarises the international literature which is heavily skewed towards the German case. This review focuses, first, on the...