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Separating Introduction Effects from Selectivity Effects: The Differences in Employment Patterns of Codetermined Firms
Author(s) -
Gralla Rafael,
Kraft Kornelius
Publication year - 2018
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/labr.12121
Subject(s) - dismissal , economics , labour economics , significant difference , constant (computer programming) , demographic economics , political science , law , computer science , programming language , statistics , mathematics
Abstract This study examines differences in employment growth between firms with and without works councils by separating introduction effects from potential selectivity effects. Using a difference‐in‐differences framework, we show that firms with works councils have higher employment growth before adopting a works council. However, employment growth declines after introduction. We identify the reason for lower employment growth in reduced hiring rates, while dismissal rates remain constant.