Trade Union and Employment: The Korean Experience

Abstract

Using Workplace Panel Survey of 2005, 2007 and 2009 waves, this study estimates the effects of trade unions on employment and the proportion of irregular workers, short-term and part-time workers, and agent temporary and outsourced workers. While the estimation result shows that the percentage of hired workers increases under union presence, these results seem to be contaminated with bias because the differences between unionized firms before union establishment and non-unionized firms are not completely controlled even after adjusting for observed characteristics. Meanwhile, unionized firms and non-unionized firms with grievance procedures employ higher proportion of irregular workers. The proportion of short-term and part-time workers increases only when they are entitled to join trade unions. These imply that the rise in the percentage of irregular workers due to unions and grievance procedures is attributed to the increase in the percentage of agent temporary and outsourced workers. Also, when short-term and part-time workers are allowed to join the union, the firm replaces agent temporary and outsourced workers with short-term and part-time workers, so that the proportion of irregular workers do not change.