According to the German Works Constitution Act, establishments
above certain thresholds defined by the number of employees must release members of their works councils from work and enable them to do a full-time job as works councilors. Using a full sample of all establishments affected, we analyse whether making provision for the first full-time works councilor dampens employment growth. We also investigate whether the change of the threshold value from 300 to 200 employees that came into effect in July 2001 changed employment growth at these thresholds. Descriptive as well as econometric analyses suggest that neither the old nor the new threshold value has affected
establishments’ employment growth. The same holds for the legal reform of this threshold value.