Abstract

We explore the relationship between co-determination and the duration of recruitment processes. Works councils hold extensive co-determination rights in the hiring process, including the determination of job posting modalities, the approval of personnel measures, and the establishment of selection criteria, particularly in large establishments. Using data from the IAB Job Vacancy Survey, we examine whether and to what extent the presence of works councils is associated with frictions in the recruitment process. To do so, we differentiate between frictions during the search process—from the start of search to the decision on a candidate—and the temporal delay between the decision on a candidate and their actual start date. To investigate these issues, we employ duration models. Our findings will inform policy by highlighting the role of co-determination in hiring frictions and the extent of frictional unemployment.