We estimate dynamic effects of works councils on labor productivity using newly available information from West German establishment panel data. Conditioning on plant fixed effects and control variables, we find negative productivity effects during the first five years after council...

Using unique survey data from the German Socio-Economic Panel, this study examines the influence of reciprocal inclinations on workers' sorting into codetermined firms. Employees with strong negative reciprocal inclinations are more likely to work in firms with a works council while employees...

Using German establishment data, this study provides the first econometric analysis on the interaction of establishment-level codetermination and foreign owners. Works councils are associated with higher productivity in domestic-owned establishments while they are associated with lower...

A model by Huebler and Jirjahn (2003) suggests that rent-seeking activities of works councils are more limited in establishments covered by collective bargaining. The model predicts that works councils should have a stronger productivity effect and a weaker wage effect in covered than in...

Using a microeconomic model and data from the Establishment Panel of the German Institute for Employment Research, we analyze the optimal establishment size against the background of rent-seeking workers and the influence of works councils. The theoretical part shows that establishment size has...