Comparative Studies on the Economic Effects of Legislation Applicable to Companies in France and Germany

Tasks

This project presents comparative analyses of the regulations that French and German companies are subject to. The project begins by presenting the differences and similarities between the legislation applicable in France and in Germany. It then analyses the economic effects of the regulations on companies in France and Germany. Finally, potential reforms for France are evaluated from an economic perspective.

Methods

The analyses are carried out both qualitatively and quantitatively. The first part of the project compares laws, regulations and institutions in France and in Germany. In the second part, the effects of these regulations on enterprises in the two countries are analysed. This is done in an empirical framework; firstly, the existing empirical literature is summarised and a similar empirical analysis is subsequently conducted. The final part of the analysis consists of an evaluation of potential reforms for France based on the findings of the previous parts of the project.

Data and other sources

For its qualitative comparison, the project refers to the respective French and German laws and regulations. For the empirical analyses, it draws on various datasets including, for example, AMADEUS data and IAB data.

Results

The first part of the study compares the institutional settings of employee representation and collective bargaining in France and Germany. One important difference is that in France, many aspects of collective agreements are defined by labour law, whereas in Germany, collective bargaining partners are given far greater scope for negotiation. The second part of the study analyses the economic effects of different institutional settings. Greater wage flexibility has positive effects on competitiveness and employment. In the last part of the study, reform proposals made by Jean-Denis Combrexelle, President of the Department of Social Affairs of the government council, are evaluated. His proposals to enlarge the scope of collective bargaining and also allow firm-level bargaining are welcome. Moving from the indeterminate duration of firm agreements to well-defined contract periods would reduce uncertainty for both firms and workers. The implementation of these reform proposals would be most effective if they were combined with a peace obligation, meaning that no strikes would be allowed for an agreed period of time. The proposal to maintain extensions of industrial agreements by the Labour Minister is counterproductive and would partly eliminate gains from other proposals.

Publication

Poutvaara, Panu, Daniel Leithold, Till Nikolka, Katrin Oesingmann and Daniela Wech, "Étude comparative de l’ifo sur les pouvoirs et la représentativité des représentants de salariés dans l’entreprise en France et en Allemagne", in: Rapport d'information n° 647 (2015-2016) de Mme Annick BILLON, fait au nom de la Délégation aux entreprises, Sénat, Paris, 2016, 77–102, Information