Skip to main content
SpringerLink
Log in

Trade Unions and Workers’ Life Satisfaction in South Korea

  • Published:
Applied Research in Quality of Life Aims and scope Submit manuscript

Abstract

This study analyses the effects of trade unions’ presence in workplaces and union membership on workers’ overall life satisfaction. We estimate a correlated random effects panel ordered probit model using the Korean Labor and Income Panel Study. While the presence of unions increases the probability of reporting a higher level of overall life satisfaction, union membership has no effect. These effects exist only for healthy men who are employed on a permanent contract. Finally, we show that unions’ effects on life satisfaction have four mediating channels—job satisfaction, social security, real wage and fringe benefits.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. There are some studies on trade union and job satisfaction, such as those by Bryson et al. (2004), Bryson et al. (2010), García-Serrano (2009), and Hammer and Avgar (2005) and Laroche (2016)

  2. Trade union density peaked in 1988 and 1989 just after the nationwide democracy movement against the military regime in 1987. Subsequently, it decreased significantly.

  3. In South Korea, usually, employment on a permanent contract offers a contractual working period that lasts longer than 1 year, whereas temporary employment has a contractual period lasting longer than a month and less than a year. Daily workers have either contracts shorter than a month or no fixed location of work, usually being employed on a daily basis. In this study, we include daily workers in the temporary contract.

  4. In the jeonse system, a renter makes a lump-sum deposit on a rental space, at anywhere from 50 to 80% of the market value instead of paying monthly rent. The contractual rental period is usually 2 years and a property owner returns the lump-sum deposit to the renter at the termination period. This peculiar system was formulated when the South Korean financial market was not properly developed. Under this system, a property owner gains from the investment using the lump-sum deposit for 2 years and the renter is guaranteed to reside in the property for 2 years without additional costs. A monthly rental is usually considered inferior to jeonse property.

  5. Income was converted into the real terms using consumer price index (2015 = 100). In addition, we adjusted household income using equivalised scale.

  6. See Lancaster (2000) and Ch. 15 in Wooldridge (2010) for further details on this issue.

  7. Chamberlain (1980) allowed more generality by having xi, the vector of all explanatory variables across all the time periods, in place of \(\bar {x}_{i}\).

  8. For a detailed explanation, readers are referred to Ch. 16 in Wooldridge (2010).

  9. We use the xtoprobit command in Stata SE 13.

  10. The full results are available from the author on request. The coefficients of 9 out of 16 average values are statistically significant.

  11. In South Korea, collective bargaining occurs at the firm level and, usually, an agreement applies to non-union members also. This works through direct and indirect channels. The former is described in Articles 35 (general binding force) and 36 (geographic binding force) of The Trade Union Act. The latter is contained in Article 96 (observance of collective agreement) of The Labor Standards Act and Article 33 (validity of standards) of The Trade Union Act. Hwang (2017) argues that the latter channel has much larger effects.

  12. For detailed information, see Patterson and Walcutt (2013) and Schauer (2018).

  13. Although there is no union effect on life satisfaction for females in Table 4, there is a membership effect given being a union member. That is, being female is generally related to a negative attitude towards unions, but this effect seems to disappear once a female worker joins a union.

  14. By law, social insurance subscription should be applied to any workplace that employs more than one worker. However, according to Health and Welfare Data Portal in South Korea, subscription rates for national pension, national health insurance and employment insurance are 67.6%, 71.3% and 67.7%, respectively, as of 2014.

References

  • Ahlquist, J. (2017). Labor unions, political representation, and economic inequality. Annual Review of Political Science, 20, 409–432.

    Article  Google Scholar 

  • Altman, D, Flavin, P, & Radcliff, B. (2017). Democratic institutions and subjective well-being. Political Studies 65, 685–704.

  • Baron, R., & Kenny, D. (1986). The moderator-mediator variable distinction in social psychological research, conceptual, strategic, statistical considerations. Journal of Personality, Social Psychology 51, 1173–1182.

  • Bjørnskov, C., Dreher, A., & Fischer, J. (2007). The bigger the better? Evidence of the effect of government size on life satisfaction around the world. Public Choice 130, 267–292.

  • Bjørnskov, C., Dreher, A., & Fischer, J. (2010). Formal institutions, subjective well-being, Revisiting the cross-country evidence. European Journal of Political Economy 26, 419–430.

  • Bowling, N, Eschleman, K., & Wang, Q. (2010). A meta-analytic examination of the relationship between job satisfaction, subjective well-being. Journal of Occupational, Organizational Psychology 83, 915–934.

  • Bryson, A. (2007). The effect of trade unions on wages. Reflets et Perspectives 46, 33–45.

  • Bryson, A., Cappellari, L., & Lucifora, C. (2004). Does union membership really reduce job satisfaction?. British Journal of Industrial Relations 42, 439–459.

  • Bryson, A., Cappellari, L., & Lucifora, C. (2010). Why so unhappy? The effects of unionization on job satisfaction. Oxford Bulletin of Economics, Statistics 72, 357–380.

  • Bryson, A. (2014). Union wage effects. IZA World of Labor 35, 1–10.

  • Chamberlain, G. (1980). Analysis of covariance with qualitative data. The Review of Economic Studies 47, 225–238.

  • Charman, C., & Owen, A. (2014). Collective happiness, labor union membership, life satisfaction. Applied Economics Letters 21, 924–927.

  • Cheung, F., & Lucas, R. (2014). Assessing the validity of single-item life satisfaction measures, results from three large samples. Quality of Life Research 23, 2809–2818.

  • Cho, D.H. (2008). A longitudinal analysis of the union effect on the wages. (in Korean). Korean Journal of Labor Economics 31, 103–128.

  • Eren, O. (2007). Measuring the union-nonunion wage gap using propensity score matching. Industrial Relations 46, 766–780.

  • Farber, H., Herbst, D., Kuziemko, I., & Naidu, S. (2018). Unions, inequality over the twentieth century, New evidence from survey data. Working Paper No.620, Princeton University.

  • Flavin, P., Pacek, A., & Radcliff, B. (2010). Labor unions, life satisfaction, Evidence from new data. Social Indicators Research 98, 435–449.

  • Flavin, P., & Shufeldt, G. (2016). Labor union membership, life satisfaction in the United States. Labor Studies Journal 41, 171–184.

  • Freeman, R. (1981). The effects of unionism on fringe benefits. Industrial, Labor Relations Review 34, 489–509.

  • Frey, B. (2008). Happiness, A Revolution in Economics. Cambridge, The MIT Press.

  • García-Serrano, C. (2009). Job satisfaction, union membership, collective bargaining. European Journal of Industrial Relations 15, 91–111.

  • Gärling, T., & Diener, A. (2018). Life satisfaction, emotional well-being, Psychological, economic, social factors. In Ranyard, R. (Ed.) Economic Psychology (pp. 405–420). Hoboken: Wiley-Blackwell.

  • Hammer, T.H., & Avgar, A. (2005). The impact of unions on job satisfaction, organizational commitment, turnover. Journal of Labor Research 26, 241–266.

  • Headey, B., & Wooden, M. (2004). The effects of wealth, income on subjective well-being, ill-being. The Economic Record 80, S24–S33.

  • Hudson, N., Anusic, I., Lucas, R., & Donnellan, B. (2020). Comparing the reliability, validity of global self-report measures of subjective well-being with experiential day reconstruction measures. Assessment 27, 102–116.

  • Hwang, S.-O. (2017). Union effects on nonunion wages, A regional panel data analysis for Korea. (in Korean). Korean Journal of Labor Studies 23, 79–108.

  • ILO. (2006). Social security for all, Trade union policies. Labor Education No.145, International Labor Organization.

  • Inglehart, R., Foa, R., Peterson, C., & Welzel, C. (2008). Development, freedom, rising happiness. Perspectives on Psychological Science 3, 264–285.

  • Jackson, P.B. (1992). Specifying the buffering hypothesis, Support, strain, depression. Social Psychology Quarterly 55, 363–378.

  • Jovanović, V., & Lazić, M. (2018). Is longer always better? A comparison of the validity of single-item versus multiple-item measures of life satisfaction. Applied Research in Quality of Life Epub ahead of print 4 December 2018. https://doi.org/10.1007/s11482-018-9680-6.

  • Jung, M., Muntaner, C., & Choi, M. (2010). Factors related to perceived life satisfaction among the elderly in South Korea. Journal of Preventive Medicine, Public Health 43, 292–300.

  • Kapteyn, A., Lee, J., Tassot, C., Vonkova, H., & Zamarro, G. (2015). Dimensions of subjective well-being. Social Indicators Research 123, 625–660.

  • Kornfeld, R. (1993). The effects of union membership on wages, employee benefits, The case of Australia. Industrial, Labor Relations Review 47, 114–128.

  • KOSHA. (2017). Occupational Safety, Health Guideline. Seoul, Korea Occupational Safety, Health Agency.

  • Lancaster, T. (2000). The incidental parameter problem since 1948. Journal of Econometrics 95, 391–413.

  • Laroche, P. (2016). A meta-analysis of the union-job satisfaction relationship. An International Journal of Employment Relations 54, 709–741.

  • Malinowski, B, Minkler, M., & Stock, L. (2015). Labor unions, a public health institution. American Journal of Public Health 105, 261–271.

  • Miller, P., & Mulvey, C. (1992). Trade unions, collective voice, fringe benefits. Economic Record 68, 125–141.

  • Mundlak, Y. (1978). On the pooling of time series, cross section data. Econometrica 46, 69–85.

  • Patterson, L., & Walcutt, B. (2013). Korean workplace gender discrimination research analysis, a review of the literature from 1990 to 2010. Asia Pacific Business Review 19, 85–101.

  • Peterson, C., Sussell, A., Li, J., Schumacher, P., Yeoman, K., & Stone, D. (2020). Suicide rates by industry, occupation-National violent death reporting system, 32 states, 2016. Morbidity and Mortality Weekly Report Vol.69, Centers for Disease Control, Prevention.

  • Plagnol, A. (2010). Subjective well-being over the life course, Conceptualizations, evaluations. Social Research 77, 749–768.

  • Reynolds, M., & Brady, D. (2012). Bringing you more than the weekend, Union membership, self-rated health in the United States. Social Forces 90, 1023–1049.

  • Satici, B. (2019). Testing a model of subjective well-being, The roles of optimism, psychological vulnerability, shyness. Health Psychology Open 6, 1–8.

  • Schauer, J. (2018). Labor market duality. IMF Working Paper WP/18/126, IMF.

  • Streeck, W., & Hassel, A. (2013). Trade unions as political actors. In Addison, JT., & Schnabel, C. (Eds.) International Handbook of Trade Unions (pp. 335–365). Chaltenham: Edward Elgar.

  • Tov, W., & Diener, E. (2007). Culture, subjective well-being. In Kitayama, S., & Cohen, D. (Eds.) Handbook of Cultural Psychology (pp. 691–713). New York: Guilford.

  • Uehara, E. (1990). Dual exchange theory, social networks, informal social support. American Journal of Sociology 96, 521–557.

  • Unanue, W., Gómez, M., Cortez, D., Oyanedel, J., & Mendiburo-Seguel, A. (2017). Revisiting the link between job satisfaction, life satisfaction, The role of basic psychological needs. Frontiers in Psychology 8, 1–17.

  • Veenhoven, R. (2012). In Land, K., Michalos, A., & Sirgy, M.J. (Eds.) Handbook of Social Indicators, Quality of Life Research (pp. 63–77). Dordrecht: Springer Publishers.

  • Waddoups, J. (2005). Trade union decline, union wage effects in Australia. Industrial Relations 44, 607–624.

  • Wooldridge, J. (2010). Econometric Analysis of Cross Section, Panel Data. Cambridge, The MIT Press.

  • Yoon, J.D. (2007). Development of social insurance in Korea, the role of trade union. e-Labor News No.73, Korea Labor Institute.

  • Yun, M.S., & Kim, J. (2014). Panel study on labor union wage premium controlling of labor union preference. (in Korean). Korean Journal of Labor Studies 20, 167–196.

Download references

Acknowledgments

I thank Ki-Won Rho for his helpful comments throughout the work.

Author information

Authors and Affiliations

  1. School of Economics and Finance, Yeungnam University, 280 Daehak-Ro, Gyeongsan, Gyeongbuk, 38541, South Korea

    Yong-Woo Lee

Authors
  1. Yong-Woo Lee
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Yong-Woo Lee.

Ethics declarations

Conflict of Interest

The authors declare that they have no conflict of interest.

Additional information

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Ethical Statement

This article does not contain any studies involving human participants performed by the author. This article does not contain any studies involving animals performed by the author.

Appendix

Appendix

Table 9 The distribution of overall life satisfaction
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Lee, YW. Trade Unions and Workers’ Life Satisfaction in South Korea. Applied Research Quality Life 17, 277–298 (2022). https://doi.org/10.1007/s11482-020-09892-5

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11482-020-09892-5

Keywords

Search

Navigation