Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/73411 
Year of Publication: 
2009
Series/Report no.: 
BGPE Discussion Paper No. 81
Publisher: 
Friedrich-Alexander-Universität Erlangen-Nürnberg, Bavarian Graduate Program in Economics (BGPE), Nürnberg
Abstract: 
As they are employee associations, it is typically presumed that works councils redistribute economic rents from firm owners to workers. And indeed, empirical literature suggests that works councils reduce profits although, at the same time, they increase productivity. Studies on the profitability effect of works councils, however, mainly use self-reported subjective profit evaluations of managers as the dependent variable. I additionally use objective measures to check the validity of these results. While negative effects are reproduced with the subjective measure, non-negative effects for the objective measures contradict previous results. With the objective measures, the works council effect on profit further increases if attempts are made to control for self-selection, and it is generally positive if the establishment is covered by a collective bargaining agreement. Further results indicate that the subjective profit measure is a poor measure of actual profits and that it is hardly appropriate as a dependent variable in a profit regression.
Subjects: 
worker participation
works council
profit
rent distribution
JEL: 
J53
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.