Union Wage Gap in Vietnam: A Distributional Analysis

Labor relations in Vietnam are undergoing a dramatic transition, moving from a system dominated by a single state-led trade union federation toward one that permits the formation of more independent unions. Understanding the impact of trade unions on labor market outcomes is therefore increasingly urgent to support this transition. However, empirical evidence remains scarce due to data limitations. This study provides the first evidence on the effects of trade unions on workers' wages across the wage distribution in the private sector, using a large, nationally representative dataset. Employing the Unconditional Quantile Regression approach, we estimate union effects across the wage distribution and find consistently negative coefficients at all quantiles for men. To further examine the distributional structure of the wage gap, we implement an Oaxaca-Blinder-type decomposition based on the Recentered Influence Function. The decomposition results reveal that, for both men and women, the wage gap becomes increasingly negative from the middle toward the upper end of the wage distribution. While the total explained component displays some instability at the lower quantiles, its absolute magnitude rises substantially at higher quantiles. This research contributes to a deeper understanding of union roles in contexts where political institutions play a dominant role in shaping union activities.