Overview
- A joint study by the ifo Institute, the Institute for Employment Research (IAB) and the University of Konstanz reports its findings on November 4, 2025.
- The analysis compares similar German plants with and without works councils that introduced automation in the second half of the past decade.
- Before automation, plants with works councils were about 10 percent more productive on average, a difference the authors note was not statistically significant.
- After automation, the productivity gap widens to nearly 30 percent with statistical and economic significance, and three years after robot adoption relative incomes are about 10 percent higher in plants with councils.
- Authors point to greater training provision and uptake as key mechanisms and note that councils may greenlight automation only when returns are clearer, while wage protections can curb inequality within plants but shift costs onto other employees.