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Reciprocity and Workers’ Tastes for Representation

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Abstract

Using unique survey data from the German Socio-Economic Panel, this study examines the influence of reciprocal inclinations on workers’ sorting into codetermined firms. Employees with strong negative reciprocal inclinations are more likely to work in firms with a works council while employees with strong positive reciprocal inclinations are less likely to work in such firms. However, the results also show striking gender differences in the relationship between reciprocity and taste for representation.

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Notes

  1. Exceptions are the contributions by Leuven et al. 2005 and Dohmen et al. 2008, 2009.

  2. See Fehr et al. 2005 for the neuroeconomic foundations of such social preferences.

  3. Mitzkewitz and Nagel 1993 and Hennig-Schmidt et al. 2010 provide evidence that information asymmetry has indeed an influence on reciprocal behavior. Asymmetric information appears to negatively affect cooperation.

  4. While experimental studies provide mixed evidence on the relationship between gender and reciprocity (Croson and Gneezy 2009), the examination by Dohmen et al. 2008 demonstrates that it can be crucial to control for other personality traits to identify that relationship.

  5. Cornelissen et al. 2014 use this information to examine the selection of workers into firms with profit sharing plans.

  6. Managerial employees are excluded as the WCA does not apply to this group of employees. Apprentices are excluded as this is a group of very young and inexperienced workers with restricted mobility during the period of their apprenticeship training.

  7. We do not distinguish between male full-time and part-time employees as most men in our sample work full-time.

  8. See Bohnet and Zeckhauser (2004) and James (2002) for a general discussion on trust, vulnerability and the fear of exploitation.

  9. We also estimated a univariate probit of being a works councilor in which we included the dummy variable for East Germany. The dummy variable did not emerge as a significant determinant. While including the identifying variable in a single-equation model provides no formal test of the validity of that variable, it offers a clear sense of the patterns in the data and provides useful indications (Evans and Schwab 1995).

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Acknowledgements

The authors would like to thank participants at 2012 IAFEP conference and the 2012 EALE conference for their helpful comments.

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  1. Fachbereich IV, Lehrstuhl für Arbeitsmarktökonomik, Universität Trier, Universitätsring 15, 54286, Trier, Germany

    Uwe Jirjahn & Vanessa Lange

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  1. Uwe Jirjahn
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  2. Vanessa Lange
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Correspondence to Uwe Jirjahn.

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Jirjahn, U., Lange, V. Reciprocity and Workers’ Tastes for Representation. J Labor Res 36, 188–209 (2015). https://doi.org/10.1007/s12122-015-9198-8

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