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

PurposeThis paper examines the effects of sub-national union coverage on the youth's labor market outcomes.Design/methodology/approachIn 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.FindingsThe 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.Originality/valueThis 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.

Internal Information Environment and Labor Investment Efficiency

This study investigates the relation between internal information environment and labor investment efficiency. We argue that better internal information quality allows managers to obtain more timely and accurate information from subordinates and therefore make better decisions in labor investments. Our results suggest that the labor investments of firms with high quality internal information have less deviation from the optimal level. This association holds for both companies in industries with high and low union coverage.

Automation, Occupational Earnings Trends, and the Moderating Role of Organized Labor

Routine-biased technological change has emerged as the dominant explanation for the differential earnings growth of occupations at greater risk of automation, such as machine operators or office clerks, relative to less routine occupations. In contrast, this paper finds that the declining earnings returns to an occupation’s routine task intensity (RTI) can largely be attributed to the decline of organized labor. Using individual-level data on 3.3 million employed adults across the United States from 1983 to 2017, this paper finds that organized labor has two countervailing effects on occupations at greater risk of automation. First, higher union coverage within a state and industry inhibits the decline in earnings returns to an occupation’s RTI. Second, higher union coverage hastens the decline in employment shares of occupations with higher RTI. The result is that occupations at greater risk of automation experience more favorable earnings growth where unions are more resilient, but at the cost of accelerated declines in their employment shares. Counterfactual analyses demonstrate that if union coverage in the United States had remained stable at 1983 levels, the earnings returns to an occupation’s RTI might not have declined from 1983 to 2017, and the observed pattern of occupational earnings polarization in the 1990s might not have occurred. However, the mean RTI of occupations might have declined by an additional 21 percent from 1983 to 2017 relative to the observed decline. The findings suggest that the social consequences of automation are conditional on the strength of organized labor.

Automation, Occupational Earnings Trends, and the Moderating Role of Organized Labor

Routine-biased technological change has emerged as the dominant explanation for the differential earnings growth of occupations at greater risk of automation, such as machine operators or office clerks, relative to less routine occupations. In contrast, this paper finds that the declining earnings returns to an occupation’s routine task intensity (RTI) can largely be attributed to the decline of organized labor. Using individual-level data on 3.3 million employed adults across the 50 United States from 1983-2017, this paper finds that organized labor has two countervailing effects on occupations at greater risk of automation. First, higher union coverage within a state and industry inhibits the decline in earnings returns to an occupation’s RTI. Second, higher union coverage hastens the decline in employment shares of occupations with higher RTI. The result is that occupations at greater risk of automation experience more favorable earnings growth where unions are more resilient, but at the cost of accelerated declines in their employment shares. Counterfactual analyses demonstrate that if union coverage in the U.S. had remained stable at 1983 levels, the earnings returns to an occupation’s RTI might not have declined from 1983-2017, and the observed pattern of occupational earnings polarization in the 1990s might not have occurred. However, the mean RTI of occupations might have declined by an additional 21 percent from 1983-2017 relative to the observed decline. The findings suggest that the social consequences of automation are conditional on the strength of organized labor.

Do Informal Contracts Matter for Corporate Innovation? Evidence from Social Capital

We examine the relevance of informal contracting mechanisms for corporate innovation. Using social capital to capture the social costs imposed on opportunistic behavior by management, we report evidence that firms headquartered in states with higher levels of social capital are associated with more innovation. This result is more pronounced when employees are more susceptible to holdup (e.g., firms with low labor union coverage, firms located in states with weak legal protections for employees, and firms surrounded by few external employment opportunities) and when employees face higher levels of information asymmetry. Our study highlights the importance of informal contracts for innovation.

Worker Power and Class Polarization in Intra-Year Work Hour Volatility

Precarious work, which has become more prevalent in the United States in recent decades, is disproportionately experienced by workers of lower socio-economic classes, and research suggests that the erosion of worker power has contributed to this class polarization in precarity. One dimension of precarious work of growing interest to scholars and policymakers is instability faced by workers in the amount and regularity of their work hours. However, we know little about the magnitude of month-to-month or week-to-week (intra-year) volatility in hours worked, the extent of class-based polarization in this measure of job quality, and whether worker power moderates this polarization. In this paper, we make novel use of the panel nature of the nationally-representative Current Population Survey (CPS) to estimate intra-year volatility in the actual hours respondents report working in the previous week across four consecutive survey months. Using this new measure, we then show that, net of demographic characteristics and controls for occupation and industry, low-wage workers experience disproportionately greater work hour volatility. Finally, we find evidence that reductions in marketplace bargaining power—as measured by higher state-level unemployment rates—increase wage- and education-based polarization in work hour volatility, while increases in associational power—as measured by union coverage—reduce wage-based polarization in work hour volatility.

Changes in Workplace Heterogeneity and How They Widen the Gender Wage Gap

Using linked employer-employee data for West Germany, I investigate the role of growing wage differentials between firms in the slowdown of gender wage convergence since the 1990s. The results show that two factors are at play: first, high-wage firms experience higher wage growth and employ disproportionately more men, and second, male firm premiums grow faster than female premiums in the same firms. These developments were catalyzed by a decline of union coverage, coupled with more firm-specific wage setting in collective bargaining agreements. Taken together, these conditions prevented the gender gap from narrowing by approximately 15 percent between the 1990s and 2000s. (JEL J16, J51, J31, J71)

Worker Power and Class Polarization in Intra-Year Work Hour Volatility

Precarious work, which has become more prevalent in the United States in recent decades, is disproportionately experienced by workers of lower socio-economic classes, and research suggests that the erosion of worker power has contributed to this class polarization in precarity. One dimension of precarious work of growing interest to scholars and policymakers is instability faced by workers in the amount and regularity of their work hours. However, we know little about the magnitude of month-to-month or week-to-week (intra-year) volatility in hours worked, the extent of class-based polarization in this measure of job quality, and whether worker power moderates this polarization. In this paper, we make novel use of the panel nature of the nationally-representative Current Population Survey (CPS) to estimate intra-year volatility in the actual hours respondents report working in the previous week across four consecutive survey months. Using this new measure, we then show that, net of demographic characteristics and controls for occupation and industry, low-wage workers experience disproportionately greater work hour volatility. Finally, we find evidence that reductions in marketplace bargaining power--as measured by higher state-level unemployment rates--increase wage- and education-based polarization in work hour volatility, while increases in associational power--as measured by union coverage--reduce wage-based polarization in work hour volatility.

DENSITI, CAKUPAN DAN PENGIKTIRAFAN KESATUAN SEKERJA: ANALISIS KAJIAN LEPAS

Abstrak Kajian literatur menunjukkan pelbagai kajian yang dibuat oleh sarjana-sarjana Hubungan Industri tentang pergerakan kesatuan sekerja di seluruh dunia. Pergerakan kesatuan sekerja pastinya mencorakkan sistem hubungan industri. Hal ini demikian kerana kesatuan sekerja merupakan salah satu faktor yang mempunyai matlamat memelihara dan melindungi kebajikan dan kepentingan hak asasi golongan pekerja. Kajian ini menggunakan kaedah analisis sekunder dengan menekankan tiga elemen yang dianggap penting untuk menentukan kekuatan kesatuan sekerja, iaitu densiti kesatuan, cakupan kesatuan dan pengiktirafan kesatuan sekerja. Objektif artikel ini adalah untuk mengenal pasti elemen utama di antara ketiga-ketiga elemen kekuatan kesatuan sekerja yang dijalankan oleh pengkaji-pengkaji lepas. Artikel ini mendapati setiap ketiga-tiga elemen ini dikelaskan secara berasingan, sedangkan rangkuman ketiga-tiga ini perlu dibuat kerana kajian tentang kekuatan kesatuan sekerja boleh diterokai dengan lebih jelas dengan menggunakan faktor densiti kesatuan, cakupan dan pengiktirafan kesatuan. Kedua, kajian terkini khasnya yang menekankan tentang cakupan kesatuan masih terhad. Kajian yang menekankan tentang cakupan kesatuan perlu ditekankan kerana mampu mencorakkan solidariti kesatuan sekerja semasa. Kata kunci: Elemen kekuatan kesatuan sekerja, densiti kesatuan, cakupan kesatuan, pengiktirafan kesatuan. Abstract The literature review shows the various studies made by Industrial Relations scholars on the movement of trade unions worldwide. The trade union’s movement definitely shapes the industrial relations system. This is because trade union is one of the factors that have the goal of preserving and protecting the welfare and importance of the workers’ rights. This research uses the secondary analysis method that emphasizes on the three elements that considered vital in determining the strength of trade union, namely unity density, union coverage and union recognition. The objective of this article is to identify the key element between the three elements of union strength that are often applied based on previous studies. This article finds that each of these three elements is classified separately,whereas the summary of these three need to be made as studies on the strength of trade unions can be explored more clearly by using the factors of union density, coverage and union recognition. Secondly, the latest research especially that emphasizes on the union’s coverage is still limited. A study that emphasizes on the coverage of the union should be emphasized as it depicts the solidarity of current trade unions. Keywords: Elements of union strength, union density, union coverage, union recognition.