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What Does Codetermination Do?

Provides a qualitative review of existing codetermination laws, and a quantitative study on the country-level effects of codetermination reforms between the 1960's and 2010's. Overall, the authors find no negative effects, and hints of potential positive ones. They explore three explanations for codeterminations limited impact: limited power conferral, high baselines of informal worker participation, and high baselines of formal worker institutions.

2021

Academic Paper

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On the whole, codetermination laws in European countries appear to have zero effect on the economy, or very small, positive effects on worker, firm, and macroeconomic outcomes. Existing codetermination laws convey relatively little power to workers. European countries with codetermination laws already have high baseline levels of worker involvement in decision making, rendering the potential impacts of codetermination laws moot. Codetermination laws have been passed in countries with already existing pro-worker institutions, such as centralized collective bargaining systems, high union coverage, and extensive labor market regulations. Thus, the low hanging fruit of codetermination's potential impact may already be plucked. Codetermination can be formulated as either a mandate applied to all firms, or a right for workers in covered firms to take up codetermination, should they wish to. In Denmark, Norway, and Sweden, workers in about 53% of covered firms take up their right to codetermination. In Finland, the number is 15%.
Benjamin Schoefer Shakkad Noy Simon Jäger
Basic Income Codetermination
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