Spillover effects of international standards: Working conditions in the Vietnamese SMEs

Neda Trifkovic, UNU-WIDER

Private international standards are commonly applied to improve market access and competitiveness. While most studies focus on trade effects and organizational outcomes, very few studies look at the effect of standards on employees. Using a three-year matched employer-employee panel dataset, this paper finds that the application of management standards improves working conditions in small and medium enterprises (SMEs) in Vietnam. Certified firms pay higher wages on average, implying that the adoption of standards could boost labor productivity. They are also more likely to offer formal contracts, illustrating that benefits from standards also have non-monetary aspects. These effects come from higher investment in employee training, adherence to national labor laws and engagement of non-technical workforce. There is, however, no systematic impact of standards on the provision of fringe benefits, such as paid sick leave and health, social, unemployment, and accident insurance. The estimation accounts for endogenous matching of workers with firms and unobserved heterogeneity using an instrumental variable approach. The study reveals unexpected benefits from certification.

About the speaker

Neda Trifkovic, PhD, is researcher at UNU-WIDER. She received her PhD in Development Economics from University of Copenhagen, Denmark in 2013 and her MSc in Food Chains and Development jointly from University College Cork, Ireland and University of Copenhagen, Denmark. Her main research interests are Development Economics, Standards, Global Value Chains, and Vertical Coordination.

Venue: Conference room (room 0.16 & 0.17)

Date: 26 January 2017

Time: 12:00 - 13:00