Working Paper: NBER ID: w28522
Authors: Jarkko Harju; Simon Jäger; Benjamin Schoefer
Abstract: We estimate the effects of worker voice on productivity, job quality, and separations. We study the 1991 introduction of a right to worker representation on boards or advisory councils in Finnish firms with at least 150 employees, designed primarily to facilitate workforce-management communication. Consistent with information sharing theories, our difference-in-differences design reveals that worker voice raised labor productivity. In contrast to the exit-voice theory, we find no effects on voluntary job separations, and at most small positive effects on other measures of job quality. However, we find evidence for reductions in involuntary separations during the recessionary context. A 2008 introduction of shop-floor representation, another worker voice institution pre-existing in our main sample of firms, had more limited effects.
Keywords: worker voice; productivity; job quality; board representation
JEL Codes: G3; J3; J5; J63; L22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Worker representation in boards (J54) | Labor productivity (O49) |
| Worker representation in boards (J54) | Firm survival (L21) |
| Worker representation in boards (J54) | Capital intensity (E22) |
| Worker representation in boards (J54) | Involuntary job separations (J63) |
| Worker representation in boards (J54) | Composition-adjusted wages (J31) |
| Worker representation in boards (J54) | Job quality (J24) |