Works Councils and Employment Growth: A Rejoinder to Uwe Jirjahn's Critique**/Works Councils and Employment Growth: A Reply to Addison and Teixeira**

Zusammenfassung

---

In a characteristically combative treatment, Jirjahn (2008a) argues that Addison and Teixeira's (2006) finding of a negative relationship between works council presence and employment growth is a chimera produced by the way in which establishment size is measured. We reject his assertion of misspecification for two reasons; the second of which undoubtedly contributed to leading Jirjahn astray. And while Jirjahn's treatment is of interest in its own right, he does a poor job of portraying our overall analysis. Thus, he neglects our treatment of survival bias while ignoring our presentation of a dynamic labor demand model. Elsewhere he seems to grudgingly support the former (Jirjahn 2008b), and implicitly to accept our findings pertaining to employment adjustment (where we report that works councils do not slow the tortuous pace of employment adjustment in Germany). At root, the thrust of his treatment is adversarial and his position on the economic effects of works councils over-optimistic. But the main lesson of Jirjahn's critique is that more work is required of all of us in this area. Issues raised by the present exchange, apart from the need for a wider set of covariates and longer time frame, include the selection of firms into collective bargaining and works councils and out of the system, and the consequences for the raw point estimates. Pending this work, it would be idle to overstate the robustness of the extant results. We hinted at this in our own treatment in comparing cross-sectional results with dynamic panel estimates. [PUB ABSTRACT] A reply is also presented.

Siehe den Gesamtinhalt dieses Dokumentes

Auszug

---

Works Councils and Employment Growth: A Rejoinder to Uwe Jirjahn's Critique**/Works Councils and Employment Growth: A Reply to Addison and Teixeira**

(ProQuest: ... denotes formulae omitted.)

Abstract - In a characteristically combative treatment, Jirjahn (2008a) argues that Addison and Teixeira's (2006) finding of a negative relationship between works council presence and employment growth is a chimera produced by the way in which establishment size is measured. We reject his assertion of misspecification for two reasons; the second of which undoubtedly contributed to leading Jirjahn astray. And while Jirjahn's treatment is of interest in its own right, he does a poor job of portraying our overall analysis. Thus, he neglects our treatment of survival bias while ignoring our presentation of a dynamic labor demand model. Elsewhere he seems to grudgingly support the former (Jirjahn 2008b), and implicitly to accept our findings pertaining to employment adjustment (where we report that works councils do not slow the tortuous pace of employment adjustment in Germany). At root, the thrust of his treatment is adversarial and his position on the economic effects of works councils over-optimistic. But the main lesson of Jirjahn's critique is that more work is required of all of us in this area. Issues raised by the present exchange, apart from the need for a wider set of covariates and longer time frame, include the selection of firms into collective bargaining and works councils and out of the system, and the consequences for the raw point estimates. Pending this work, it would be idle to overstate the robustness of the extant results. We hinted at this in our own treatment in comparing cross-sectional results with dynamic panel estimates.

Betriebsräte und Beschäftigungswachstum: Eine Antwort auf Uwe Jirjahns Kritik

Zusammenfassung - Jirjahn (2008a) argumentiert, dass der Befund von Addison und Teixera (2006), nach dem ein negativer Zusammenhangs zwischen der Existenz von Betriebsräten und dem Beschäftigungswachstum vorliege, ein methodisches Artefakt sei, welches aus der Art der Messung der Betriebsgröße resultiere. Wir widersprechen dieser These mit zwei zentralen Argumenten. Obwohl Jirjahns Argumentation für sich genommen interessant ist, spiegelt sie unsere Analyse insgesamt nicht vollständig wider, weil unsere Behandlung des ?survival bias" vernachlässigt und unsere Präsentation eines dynamischen Arbeitsnachfragemodells nicht zur Kenntnis genommen wird. Die Hauptbotschaft von Jirjahns Kritik ist, dass mehr Forschung notwendig ist, u.a. mit mehr Kontrollvariablen, längeren Zeithorizonten und zur Selektion der Unternehmen, in denen ein Betriebsrat gegründet oder wiederabgeschafft wird. Bis hierzu weitere Ergebnisse vorliegen, muss die Robustheit der schon vorliegenden Ergebnisse vorsichtig bewertet werden.

Key words: Works Councils, Employment Growth, Employment Adjustment, Survival Bias

1. Introduction

The effect of worker representation on employment growth has long been examined in the Anglo-Saxon literature. Contrary to their effect on some other indicators of firm performance, there has been comparatively litde disputation over the effect of unions on employment. Thus, the British (Blanchflower/Millward/Oswald 1991; Booth/McCulloch 1999; Bryson 2004a; Addison/Belfield 2004), Australian (Wooden/ Hawke 2000), and U.S. (Leonard 1992) evidence all points to reduced employment growth under unionism.1 Indeed, one can go further: the literature suggests that unionized establishments tend to grow by around 3 percent less pe...

Siehe den Gesamtinhalt dieses Dokumentes

---