Union Wage Gap in Vietnam: A Distributional Analysis

Area of Science:

• Labor economics
• Industrial relations
• Vietnam labor market dynamics

Background:

• Vietnam's labor relations are shifting from a single state-led union to independent unions.
• Understanding union impact on labor market outcomes is crucial for this transition.
• Empirical evidence on union effects in Vietnam is limited due to data constraints.

Purpose of the Study:

• To provide the first empirical evidence on trade union effects on wages across the distribution in Vietnam's private sector.
• To analyze the distributional structure of the union-によるwage gap.
• To inform policy and support Vietnam's labor market reforms.

Main Methods:

• Utilized a large, nationally representative dataset.
• Employed Unconditional Quantile Regression (UQR) to estimate union effects across the wage distribution.
• Implemented Oaxaca-Blinder-type decomposition using Recentered Influence Functions (RIF) for detailed gap analysis.

Main Results:

• Consistently negative union coefficients were found at all wage quantiles for men.
• The wage gap, influenced by unions, became increasingly negative from the middle to the upper wage distribution for both genders.
• The explained component of the wage gap increased substantially in magnitude at higher quantiles.

Conclusions:

• Trade unions in Vietnam's private sector appear to negatively impact wages across the distribution, particularly for higher earners.
• The study highlights the complex role of unions in a transitioning economy with strong institutional influence.
• Findings offer critical insights for policymakers navigating labor reforms and union development.