Finnish worker culture, no impact from board representation

Finnish worker culture. This paper (VATT/MIT/NBER/Berkley) looked at the impact of worker representation had in Finland.  Contrary to exit-voice Hirschmann there was no real impact on voluntary staff job losses. BUu there was also no real impact on margins or productivity either.

It’s maybe specific to Finland - but this could suggest that companies don’t have to be worried about workers on Board but neither do they gain very much by way of profits or anything else.


Voice at Work - economics.mit.edu/files/21196 (Harju et al 2021, How does boosting worker voice affect worker separations, job quality, wages, and firm performance? We study the 1991 introduction of a right to worker voice in Finland. Thelaw granted workers in firms with at least 150 employees the right to elect representativesto company boards. The size-dependent introduction permits a difference-in-differencesdesign. In contrast to exit-voice theory, we find no effects on voluntary job separations as arevealed-preference measure of job quality. We can also rule out small increases in the laborshare or rent sharing, with some evidence for small pay premia increases, in particular atthe bottom of the wage distribution. We detect a small reduction in involuntary separations,zero effects on worker health, and a moderate increase in survey-based subjective jobquality. Regarding firm performance, we find, if anything, small positive effects onsurvival, productivity, and capital intensity. An additional 2008 introduction of shop-floorrepresentation in smaller firms had similar, limited effects. Interviews and surveys indicatethat worker representation facilitates information sharing and cooperation rather thanshifting power or rents to labor