German Works Councils Old and New: Incidence, Coverage and Determinants

Abstract

Although works councils are a core element of the German system of industrial relations,there is little reliable information on their incidence and coverage. This paper uses data fromthe nationally representative IAB establishment panel to fill this gap. We examine thefrequency of works councils by establishment size and broad sector for eastern and westernGermany, while at the same time charting the determinants of their presence. Furthermore,we identify newly established works councils and the circumstances of their formation.Finally, we discuss the consequences of our findings for economic analysis of the institutionand for public policy.

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