Gender, Worker Representation and the Profitability of Firms in Germany

Recent research has shown that the unexplained gender wage gap is smaller in establishments where a works council is present. The finding raises the question of whether establishment-level codetermination reduces gender wage discrimination or whether it reduces a wage differential that reflects productivity differences between men and women. This study addresses the question by examining the association between the share of female employees and profitability. Using data from manufacturing establishments, the empirical analysis suggests that there is a positive association between the share of women and profitability in establishments without a works council while there is no association in establishments with a works council. These results support the hypothesis that establishment-level codetermination reduces gender-specific wage discriminationWomen, Discrimination, Profitability, Works Councils, Piece Rates

Reciprocity and Workers' Tastes for Representation

Using unique survey data from the German Socio-Economic Panel, this study examines the influence of reciprocal inclinations on workers' sorting into codetermined firms. Employees with strong negative reciprocal inclinations are more likely to work in firms with a works council while employees with strong positive reciprocal inclinations are less likely to work in such firms. We argue that these findings conform to hypotheses derived from the experimental literature. Moreover, the results showstriking gender differences in the relationship between reciprocity and taste for representation. These differences can be partially explained by gender-specific differences in the average degree of labor force attachment.Works council, negative reciprocity, positive reciprocity, sorting, gender

Ethnic Residential Segregation and Immigrants' Perceptions of Discrimination in West Germany

Using survey data from the German Socio-Economic Panel, this study shows that immigrants living in segregated residential areas are more likely to report discrimination because of their ethnic background. This applies to both segregated areas where most neighbors are immigrants from the same country of origin as the surveyed person and segregated areas where most neighbors are immigrants from other countries of origin. The results suggest that housing discrimination rather than self-selection plays an important role in immigrant residential segregation.Segregation, immigrants, housing discrimination, self-selection

Do Spillovers Stimulate Incremental or Drastic Product Innovations? Hypotheses and Evidence from German Establishment Data

We estimate the determinants of various types of product innovation. Knowledge spillovers from rivals have a positive impact on incremental innovations. This impact is largely independent of the participation in R&D cooperations. Spillovers exert no such independent influence on drastic innovation activities. The results support the hypothesis that establishments face difficulties in using knowledge that comes from areas they are not familiar with. Establishments exploit spillovers for incremental innovations rather than for drastic innovations. To a limited degree R&D cooperations can help to overcome the difficulties in using spillovers for drastic innovations. Furthermore, our estimates provide evidence that a firm?s own R&D effort and the use of outside information are substitutive. --New Products,Patents,Spillovers,Learning,R&D

Spillover Use and Innovation Success: What Role Does R&D Play?

Based on data from Germany, this study finds a positive link between using knowledge spillovers from rivals and innovation success in establishments without R&D but not in establishments with R&D. This supports the hypothesis that rivals knowledge is more valuable to establishments that are below the frontier of technology and product development

Performance pay and productivity: The moderating role of a high-wage policy

Using panel data from German establishments, this study finds that performance pay is associated with increased productivity only when it is coupled with a high-wage policy. This holds for individual-based performance pay, group-based performance pay and profit sharing

Industrielle Beziehungen und Innovationserfolg

Der vorliegende Beitrag nutzt Daten des Hannoveraner Firmenpanels, um die Einflüsse betrieblicher Mitbestimmung und tarifvertraglicher Bindung auf den Innovationserfolg von Betrieben zu untersuchen. Der Innovationserfolg wird durch den Anteil des Umsatzes gemessen, den ein Betrieb durch neu eingeführte Produkte erwirtschaften kann. Die Ergebnisse sprechen dafür, dass der Einfluss betrieblicher Mitbestimmung von der Tarifbindung des Betriebs abhängt. Ein positiver Zusammenhang zwischen der Existenz eines Betriebsrats und dem Innovationserfolg findet sich in tarifgebundenen Betrieben, während sich kein signifikanter Zusammenhang in Betrieben ohne Tarifbindung zeigt. Die Bindung an einen Tarifvertrag selbst übt einen negativen Einfluss auf den Innovationserfolg aus

Works councils and collective bargaining in Germany: A simple but crucial theoretical extension

A model by Huebler and Jirjahn (2003) suggests that rent-seeking activities of works councils are more limited in establishments covered by collective bargaining. The model predicts that works councils should have a stronger productivity effect and a weaker wage effect in covered than in uncovered establishments. While empirical studies have provided supporting evidence for the predicted productivity effects, the results on the wage effects of works councils in covered and uncovered establishments are very mixed. This article extends Huebler and Jirjahn's model to reconcile the empirical findings. The extended model takes into account that collective bargaining coverage not only limits the opportunities for rent-seeking activities but also strengthens the effectiveness of performance-enhancing work practices negotiated between employers and works councils. The latter influence of collective bargaining coverage can result in a higher wage effect of works councils in covered establishments

Teamwork and Intra-Firm Wage Dispersion among Blue-Collar Workers

Using data on a sample of manufacturing establishments in Germany, we find that the use of self-managed teams is associated with increased intra-firm wage inequality between skilled and unskilled blue-collar workers. We also show that moderating factors play an important role. While teamwork interacts positively with employer-provided further training and a production technology of the most recent vintage, it interacts negatively with the age of the establishment and the coverage by a collective bargaining agreement.technology, training, skill-biased organizational change, wage inequality, establishment age, collective bargaining

Research on trade unions and collective bargaining in Germany: The contribution of labor economics

This chapter provides a survey of econometric studies on trade unions and collective bargaining in Germany. Traditionally, these studies have examined the determinants of trade union membership and collective bargaining coverage. Recent research has a strong focus on the implications of collective bargaining for wages, flexibility and the performance of firms. Specific attention is paid to opening clauses and company-level pacts for employment and competitiveness