Labour code, location, and migration

Abstract

AbstractThe introduction of the 2012 Labour Code is considered ‘groundbreaking’ in industrial relations in Vietnam. However, knowledge about the effects of this law is still minimal. This study provides the first evidence of the impacts of the law on worker outcomes, disaggregated by location and migration status. The Vietnam Labour Force Survey is used as the primary dataset. Both difference-in-differences and fixed-effect models are applied in the investigation. The estimated results show a relationship between the introduction of the law and the labour supply of contracted workers in urban areas, especially long-term migrant workers. Furthermore, income for these long-term migrant contract workers was affected significantly by the introduction of the law. A link between the law and health insurance participation was also found among non-migrant contracted workers in urban areas. We also perform estimations using a short panel sample and find notable results. The study likewise reveals disadvantages of rural workers compared to urban workers in terms of earnings, and of short-term migrants compared to other workers, in terms of labour supply.