Abstract

This paper investigates the role of works councils on the degree of involvement with automation and digitalization technologies of German firms. The implementation of digitalization displays significant heterogeneity across German firms. The existence of works councils might be a potential explanation mechanism for this disparity. Works councils might affect the implementation of modern technologies in two opposing directions. First, works council might lead to a deceleration of the speed of the technological transformation process within firms in order to maintain the existing workforce. Second, works councils may foster the introduction of new technologies in order to guarantee the survival of the firm under high competitive pressure. Our empirical analysis is based on the latest wave of the IAB-Establishment Panel Survey of the year 2016.