This paper provides the first full examination of the effect of German works councils on wages using matched employer-employee data (specifically, the LIAB for 2001). We find that works councils are associated with higher earnings. The wage premium is around 11 percent (and is higher under...

In a characteristically combative treatment, Jirjahn (2008a) argues that Addison and Teixeira’s (2006) finding of a negative relationship between works council presence and employment growth is a chimera produced by the way in which establishment size is measured. We reject his assertion of...