EPCI (Economie politique du changement institutionnel) Seminar

Du 08/02/2019 de 11:00 à 12:30

MSE-Paris 1, Salle S/18 106-112 Bd de l’hôpital 75013 Paris

BREBION Clément (PSE)

The ‘strategic discrimination’ of works councilors in Germany: new evidence of the demise of a model?

This paper estimates the impact of works council membership on wages in Germany between 2001 and 2015. It falls within a stream of research on collective organisations which has moved the focus away from the perspective of covered firms and their average worker to concentrate on the actors leading the negotiations (Breda, 2014). To my knowledge this is the first analysis of non-unionized form of representation taking this orientation. In a generalized context of decentralization of collective bargaining, shop-floor delegates are gaining in power and therefore in strategic importance for both the employers and the employees. Their career evolution therefore has a revealing role of the ‘black box’ of, increasingly, the new core of collective bargaining. The case of Germany is chosen because both national and foreign economic actors have steadily been praising its traditional dual model of industrial relations for the cooperative feature it entails at the shop floor. Yet, as discussed in the paper, it has strongly changed since the German reunification and it is expected that the nature of employer-employee relations also evolved since then. The main model of identification is an OLS with time and individual fixed effects led on a subsample of the German Socio-Economic Panel. I find that, for individuals switching status, being a works councilor increases the hourly gross wage by about 5% in the manufacturing sector while a penalty of 4% is evidenced in the private service sectors. Causality is ensured by verifying that wage pre-trends do not differ between the treated and the control groups. I finally bring elements suggesting that the (dis-)advantage of works councilors is mostly experienced by politically involved representatives in both sectors. Bringing back the context, I explain why this may evidence a strategic behavior of rational employers.

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