Who Benefits from Worker Representation on Corporate Boards?

We study a size-contingent law in Norway that grants workers the right to board representation in firms with 30 or more employees. To analyze the impact of the law, we embed the regulation into an equilibrium model of the labor market. We show how to use behavioral responses to the regulation to identify (i) the direct effects of the policy on regulated firms and workers, (ii) the distortions from firms adjusting their size to avoid the regulation, and (iii) the equilibrium effects in the labor market. We evaluate these effects on firm profits and production, as well as on worker compensation, including both wages and non-wage amenities.