Effects of Works Councils on Firm-Provided Further Training in Germany


  • Jens Stegmaier is at the Institute for Employment Research of the Federal Employment Agency.


Unions are an important indicator of various measures of firm performance in Anglo-Saxon countries. The same is true for the German analogue of the workplace union, the works council. Using German establishment data, I examine the impact of works councils on further training. I employ pooled logit and count-data models to analyse the further training activity and intensity of German firms. Because the treatment variable may suffer from endogeneity, I also adopt linear and nonlinear instrumental variable techniques. The analysis reveals a positive impact of works councils on firm-provided training and provides slightly weaker evidence for firm-size differentials in workplace representation. I conclude that enhanced management–employee relations foster the training efforts of firms.