Worker participation is today much in vogue. Of the direct mechanisms, the German works council has attracted most theoretical and policy attention because of its participative reach, mandatory (though not automatic) nature, and seemingly limited distributive bargaining function. Despite its...

Works councils are the most important pillar of workplace industrial relations in Germany but little is known of their economic effects. The paper uses a modern, large-scale dataset to examine this issue. Consonant with recent applied theoretical conjectures, it is found that works councils are...