do german works councils counter or foster the implementation of digital technologies?

As works councils’ information, consultation and co-determination
rights affect the decision process of the management, works councils play a key
role in the implementation of digital technologies in establishments. However,
previous research focuses on the potential of digital technologies to substitute for
labor and its impact on labor market outcomes of workers. This paper adds the
role of industrial relations to the existing literature by analyzing the impact of
works councils on the implementation of digital technologies. Theoretically, the
role of works councils in the digital transformation is ambiguous. Using establishment
data from the IAB Establishment Survey of 2016 combined with individual
employee data from the Federal Employment Agency and occupational level data
about the physical job exposure, empirical evidence indicates an ambivalent
position of works councils towards digital technologies. The sole existence of
works councils is associated with statistically significant lower equipment levels
with digital technologies. However, works councils seem to foster the equipment
with digital technologies in those establishments, which employ a high share of
workers who are conducting physical demanding job activities. Thus, this study
highlights the importance of establishment-level workforce representation for the
digital adoption process within Germany.

Data and Resources

Suggested Citation

Genz, Sabrina; Bellmann, Lutz; Matthes, Britta (2019): Do German Works Councils Counter or Foster the Implementation of Digital Technologies?. Version: 1. Journal of Economics and Statistics. Dataset.

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