Separating introduction effects from selectivity effects
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Date
2011-11-03
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Abstract
This study examines differences in employment growth between firms with and
without works councils by separating introduction effects from potential
selectivity effects. Using a difference in differences framework, we show that
firms with works councils have higher employment growth before establishing a
works council. However, employment growth declines after introduction. We
identify the reason for lower employment growth in reduced hiring rates but
constant dismissal rates.
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Keywords
difference -in- differences, dismissals, employment growth, hires, works councils