published in: Industrial Relations, 2006, 45 (1), 1-25
Despite recent changes in the relationship between unionism and various indicators of firm
performance, there is one seeming constant in the Anglophone countries: unions at the
workplace are associated with reduced employment growth of around -2.5% a year. Using
German data, we examine the impact of the works council – that country’s form of workplace
representation – on employment change, 1993-2001. Works council plants have 2 to 3
percent lower employment growth having controlled for wages, changes in demand, industry
affiliation, various worker and establishment characteristics, and survival bias. That said,
works councils do not seem to further slow the tortuous pace of employment adjustment in
Germany.
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