Sub-national union coverage and the youth's labor market outcomes: evidence from a national survey in Vietnam

Abstract:

Purpose
This paper examines the effects of sub-national union coverage on the youth's labor market outcomes.

Design/methodology/approach
In the context of the private business sector in Vietnam, this study link individual labor market data with union coverage at provincial level in the period 2013–2016 to investigate the effects of sub-national union coverage on the youth's labor market outcomes. Contingent on the outcome variable, we use the OLS and probit model that control for diverse individual characteristics, year- and industry-fixed effects, and particularly control for selection bias in the labor market.

Findings
The empirical results show that the union coverage is positively associated with a wide range of the youth's labor market outcomes, including employment status, wage rate, work hour, and job formality. Also, the coverage is complementary to individual labor contract in determining the youth's wage rate.

Practical implication
Our empirical results indicate positive associations between union coverage and the youth's multi-dimensional labor market outcomes, which contribute to this young age cohort's smooth school-to-work transition, provided that the role of trade union is challenged both in developing and developed countries.

Originality/value
This study provides an in-depth study on the interplay between trade union and the youth's labor market outcomes that contributes to the literature of labor market institutions and youth employment policies in a dynamic transitional economy of Vietnam.