Do firms with works councils prefer agreeable job applicants? A discrete choice experiment

Abstract Works councils in many countries are involved in dismissal procedures and may therefore invoke high hold‐up costs for firms laying off workers. To avoid these conflicts, firms with a works council may have a stronger preference for more agreeable job applicants who have a low risk of dismissal. We conduct a discrete choice experiment among recruiters to assess their preferences regarding job applicants' personality traits and competence. In line with our expectations, we find that recruiters from works‐council firms more strongly prefer agreeable job applicants. We also find that more agreeable recruiters choose more agreeable employees, indicating a similarity‐attraction effect.