ON THE DETERMINANTS OF MANDATORY WORKS COUNCILS IN GERMANY

German works councils are often thought of as operating in all firms t hat exceed the basic size threshold (of five permanent employees) esta blished under law. Drawing on a new large-scale, representative German data set, we report that only one-fifth of firms in our sample have w orks councils even if such firms do account for almost three-fourths o f employment, The principal factors behind works council presence emer ge as fairly conventional: firm size, firm age, branch plant status, t he gender composition of the work force, and certain working arrangeme nts, There are also signs of a close relation between workplace union density and council presence. However, some controversial causal links suggested in an earlier econometric literature receive little support .