Mandatory Codetermination in Germany
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Date
2013-04-15
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Abstract
The aim of this dissertation is to provide a more detailed insight into the effects of German codetermination rights on employment and productivity. Chapter 2 deals with the impact of German codetermination rights on overtime hours. The main findings are that the effects of works councils strongly depend on the contracted working time and also differ across quantiles of the overtime hours distribution. Chapter 3 analyzes the impact of works councils on discrepancies between preferred and actual working hours of employees. It is shown that employees in codetermined establishments are more likely to match their working time preferences. This positive effect is due to a reduction of overemployment. Chapter 4 examines the differences in the likelihood of overpayment and overemployment in establishments with and without works councils. In contrast to other studies, assessments by the management concerning the existence of such problems are used. The main result is that establishments with works councils that are prepared to interfere with the management are more likely to suffer from overemployment but do not differ in the likelihood of overpayment compared to establishments without works councils. Establishments with works councils that are in line with the management, however, do not differ from establishments without a works council with regard to the likelihood of overemployment but have a lower likelihood of overpayment. In Chapter 5, differences in employment growth between firms with and without works councils by separating introduction effects from potential selectivity effects are examined. Using a difference in differences framework, it is shown that firms with works councils have higher employment growth before establishing a works council. However, employment growth declines after introduction. The reason for lower employment growth is identified in reduced hiring rates but constant dismissal rates. Finally, Chapter 6 contains an estimation of the effect of almost parity codetermination and dispersion of capital ownership of stock companies on productivity. It is shown that a concentration of capital ownership counteracts and neutralizes negative effects of codetermination. Furthermore, productivity-enhancing effects of representation by a capital owner in the supervisory board are revealed if a firm is codetermined.
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Arbeitszeiten, Beschäftigung, Entlohnung, gesetzliche Mitbestimmung, Produktivität