TY  - RPRT
        AU  - Addison, John T.
AU  - Schank, Thorsten
AU  - Schnabel, Claus
AU  - Wagner, Joachim
        TI  - German Works Councils in the Production Process
        PY  - 2003/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 812
        UR  - https://www.iza.org/publications/dp812
        AB  - 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 institution, not least in an environment of union decline. In the present
paper, we estimate the effects of works councils on productivity, 1997-2000, using a
nationally representative German data set. We recoup the works council effect by estimating
translog production functions, stochastic frontier production functions, and a model in first
differences. Once we focus on a core sample of establishments with 21 to 100 employees in
which the powers of the works council are a datum, it emerges that the positive productivity
differential is a chimera. By the same token, neither is the effect negative. This result is
important in its own right given the sharply opposing findings of past empirical research and
the partisan positions these have helped sustain.
        KW  - production functions
KW  - works councils
KW  - Germany
KW  - panel data
        ER  -