Works Councils and the Anatomy of Wages


Addison, John T. ; Teixeira, Paulino ; Zwick, Thomas


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URL: http://ub-madoc.bib.uni-mannheim.de/1472
URN: urn:nbn:de:bsz:180-madoc-14723
Document Type: Working paper
Year of publication: 2006
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: J31 J50 ,
Subject headings (SWD): Arbeitsbeziehungen , Betriebsrat , Gehaltsforderung , Arbeitsverhältnis , Deutschland
Keywords (English): matched employer-employee data , rent seeking , tenure , wages , wage distribution , works councils
Abstract: 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 collective bargaining). This result persists after taking account of worker and establishment heterogeneity and the endogeneity of works council presence. Next, using quantile regressions, we find that the works council premium is decreasing with the position of the worker in the wage distribution. And it is also higher for women than for men. Finally, the works council wage premium is associated with longer job tenure. This suggests that some of the premium is a noncompetitive rent, even if works council voice may dominate its distributive effects insofar as tenure is concerned.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Addison, John T. ; Teixeira, Paulino ; Zwick, Thomas (2006) Works Councils and the Anatomy of Wages. Open Access [Working paper]
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