Using a large panel data set we investigate whether works councils act as sand or grease in the operation of German firms. Stochastic production frontier analysis indicates that establishments with and without a works council do not exhibit significant differences in efficiency.

In a sharp break with past German research, some recent estimates have suggested that plants with work councils have 25 to 30 per cent higher productivity than their works-councilfree counterparts. Such findings can only serve to buttress the strong theoretical and policy interest in the German...

Using a large employer-employee dataset, we provide new evidence on the relationship between the gender pay gap and industrial relations from within German workplaces. Controlling for unobserved workplace heterogeneity, we find no evidence that introducing or abandoning collective agreements or...