Works Councils and Workplace Health Promotion in Germany

From a theoretical viewpoint, there can be market failures and organizational failures resulting in an underprovision of occupational health and safety. Works councils may help mitigate these failures. Using establishment data from Germany, our empirical analysis confirms that the incidence of a works council is significantly associated with an increased likelihood that the establishment provides more workplace health promotion than required by law. This result also holds in a recursive bivariate probit regression accounting for the possible endogeneity of works council incidence. Furthermore, analyzing potentially moderating factors such as collective bargaining coverage, industry, type of ownership, multi-establishment status and product market competition, we find a positive association between works councils and workplace health promotion for the various types of establishments examined. Finally, we go beyond the mere incidence of workplace health promotion and show that works councils are positively associated with a series of different measures of workplace health promotion

Reassessing the Impact of High Performance Workplaces

High performance workplace practices were extolled as an efficient means to increase firm productivity. The empirical evidence is disputed, however. To assess the productivity effects of a broad variety of measures, we simultaneously account for both unobserved heterogeneity and endogeneity using establishment panel data for Germany. We show that increasing employee participation enhances firm productivity in Germany, whereas incentive systems do not foster productivity. Our results further indicate that firms with structural productivity problems tend to introduce organisational changes that increase employee participation whereas well performing firms are more likely to offer incentives