The article has systematized previous studies on the AEG in terms of the definition, the structure of AEG and the empirical studies proving the evidence of the existence of AEG.
However, the AEG is a crucial issue associated with the external auditing function and has significant implication on the development of auditing standards and practices. In addition, because of the complex and multidimensional nature of the AEG, only a few researchers have proposed the method of measuring this gap and there are many controversial issues when applying these methods in empirical studies. Moreover, the existence of AEG is inevitable, but we can narrow this gap in many ways such as: improving efficiency, independence of auditors; audit education for users; improving the audit standards… However, the number of studies on the factors affecting the AEG in Vietnam is very limitted while it is important to identify and measure the factors affecting AEG to establish appropriate plans which ensure the reputation of the profession and maintain the public confidence in the audit.
In the future, based on the conducted research overview, the authors will inherit to develop a new method of measuring AEG in the new research context – Vietnam from the viewpoint of users with the 5 – Point Likert scale and propose a a model of factors affecting the AEG for the adoption in Vietnam.
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VIETNAMESE WORKERS' INTENTION TO PARTICIPATE IN VOLUNTARY SOCIAL INSURANCE: A CASE STUDY IN BAC NINH PROVINCE
Phung Thi Thu Huong - Le Vu Minh Quang University of Economics and Business, VNU Hanoi
Abstract
The purpose of this study was to investigates factors that affect the intention to participate in voluntary social insurance of workers. The study adopted a structural equation modeling (SEM) to examine the preferred factors that affect workers’ intention to participate with a sample of 240 respondents in Bac Ninh Province, Vietnam. The results show that TRA and TPB theories provide an appropriate model for explaining customer intention to participate; especially with Moral Responsibility, Understanding, Attitude, State Contribution Support and Customer Consulting. Furthermore, moral responsibility plays the most important role in workers intention to participate in voluntary social insurance. The results offer important implication for policymakers and voluntary social insurance providers and further research in this area could be investigated.
Keywords: intention, voluntary social insurance, Bac Ninh, moral responsibility, understanding, attitude, state’s support, consultant, SEM.
1. Introduction
Social insurance is an opportunity to reimburse part of the income of employees if they end up losing or decrease their income due to illness, maternity, occupational accident and occupational disease, disability, unemployment, old age, death, on the basis of a financial fund owing to the contribution of the parties to social insurance, with the protection of the State under the statute, to guarantee the safety of life for workers and their families as well as to contribute to the protection of social security (Social Insurance Law, 2014). Social insurance policy is a major policy in Vietnam, and an integral part of the social security policy system. The improvement of the social insurance system and the development of voluntary social insurance programs have been described as one of the key alternatives to the development of the social insurance system and have been institutionalized in a variety of legal documents.
Resolution No. 21-NQ/TW of 22 November 2012 stated: "Social insurance and health insurance are two significant social insurance programs (Central Executive Committee, 2012).
They are the core pillars of the framework of social welfare, leading to social development and equality. Socio-political stability and socio-economic growth are assured. When engaging in voluntary social insurance, low-income freelance workers will benefit from pensions that will help to ensure their old age. However, by the end of 2020, the number of voluntary social
insurance applicants will hit almost 1.1 million, an increase of 494 thousand people, nearly doubled in comparison to 2019 (only about 2.2 percent of the workforce in the age group is the farmer and the worker of the informal sector participating in voluntary social insurance) (Vietnam Social Insurance, 2020). Bac Ninh is a province located in the main economic area of Northern Vietnam with higher economic growth and living standards than other regions, but the number of employees engaging in voluntary social insurance is still very low, only 0.2% of the total number of participants in 2020 (Bac Ninh Social Insurance, 2020).
The aim of this study is to examine the current situation of workers participating in voluntary social insurance in the Province of Bac Ninh, Vietnam in order to provide effective strategies to encourage more workers to participate in voluntary social insurance. Faced with the low number of voluntary social insurance participants in the province of Bac Ninh and the general possibility of social insurance imbalances in the near future, the problem of attracting voluntary social insurance participants has become even more relevant.
2. Literature review and hypothesis development Literature Review
Many researches related to social insurance are attracting attention of many researchers (Han, 2016; Kolsrud, 2018; Lin; & Zhu, 2006; Parsons et al., 2003; Qin et al., 2015). Parsons et al., (2003) have examined the role of voluntary social system including Finland, Sweden and, more importantly, Denmark for unemployment. In other contexts, especially less advanced economies, it is suitable to develop the voluntary social system to reduce reasonable individual risk-rating when compulsary social system is overwhelming. In a survey of 600 employees in six provinces in the province of Fujian, Lin & Zhu, (2006) showed that the decision to take part in voluntary insurance depends on awareness of social security, ethical responsibility and an understanding of volunteer social insurer. In addition, Qin et al., (2015) suggested that stable employment, income and insurance policies in each locality affect the participation of workers. In the meantime, Han (2016) argued that if they considered the benefits and the insurance policy of immigrants to have an effect, the implementation of policy and propaganda should be increased to the point where immigrants will understand the policy and the Government will understand and meet the needs of the workers. Kolsrud (2018) also explored social insurance coverage for non-standard workers in OECD countries, where non-standard workers were also not covered in collective bargained social insurance schemes. Consequently, voluntary social insurance was subsidized to minimize the risk and protect the basic life for those who are non-standard workers or unemployment.
In Vietnam, numerious of studies focus on voluntary social insurance (Cuong et al., 2014; Dung & Sinh, 2019; Nam, 2019; Phuong & Song, 2014; Thao, 2017). Phuong & Song, (2014) has mentioned about the current situation of employees participating in voluntary social insurance in Vinh Phuc province with 200 surveys. Through data analysis mainly by descriptive statistical method, the author has pointed out 7 factors affecting the employees'
decision to participate in unemployment insurance, which are: Unstable employment and low income (82%), lack of information (56%), do not trust (27%), do not need insurance (11%).
Combined with the opinions of the interviewees, the study proposes several solutions to attract employees to participate in voluntary social insurance in the province such as raising awareness of the need to participate in voluntary social insurance, strongly reforming the service work of the social insurance agency; and creating supportive policies for beneficiaries of social welfare. Cuong et al., (2014); Dung & Sinh, (2019); Nam, (2019) and Thao, (2017) has investigated in researching factors affecting the interest or decision to participate of voluntary social insurance of workers from different Province such as Nghe An Province, Ben Tre Province, Tra Vinh Province, Thach That district - Ha Noi City and Vietnam. These researches mainly focused on consumer behaviour theories TRA or TPB with different factors such as social security awareness, employees' behavior, understanding of voluntary social security insurance, the social effect of voluntary social insurance, employee income, social media, volunteer social insurance policy, the awareness of adult health at age, family expectation, ethcal responsibility,income, perceived risk and moral responsibility. As can be seen from different factors, these researches on different places have brought out different results with both positive and negative affects. Therefore, it is essential for the researcher to investigate about Intention to Participate in Voluntary Social Insurance of Vietnamese workers: A case study in Bac Ninh Province – one of the most important industrial zones in the north of Vietnam.
Research Hypothesis
• Moral responsibility
Vietnamese people have the concept that children must have the responsibility to take care of their parents when they get old. However, when society is developing, many people have had a change in perception. People live more responsible for themselves, especially interested in savin when they have a stable income to have a independent in the old age, do not become a burden to the family and do not must depend on descendants.
H1: Moral responsibility has a positive influence on the decision to participate in voluntary social insurance to express the desire to protect oneself.
• People's understanding of voluntary social insurance
Understanding insurance is one of the factors affecting the intention to participate in voluntary social insurance. The intention to participate in voluntary social insurance increases when the level of knowledge the voluntary social insurance increases. Therefore, the understanding of social insurance has a positive effect on interest in participating in social insurance.
H2: Understanding of voluntary social insurance has a positive impact on participating in voluntary social insurance.
• Attitude towards participating in social insurance
When workers have positive attitudes with the voluntary social insurance policy. The intention to find information, participate and make contributions to social insurance will increase.
H3: Attitude towards voluntary social insurance has a positive influence on intentions to participate in voluntary social insurance.
• State’s Support
The State opens supportive policies to attract workers, and this increases the decision to participate in voluntary social insurance.
H4: State’s Support has a positive impact with the participation of voluntary social insurance.
• Customer Consultant
The consulting for workers on voluntary social insurance that is well done and thoughtful will have good effects on the decision to participate in voluntary social insurance.
H5: Customer Consultant that have a positive influence on interest in participating in voluntary social insurance.
In addition, the study does not research the influence of demographic factors but focuses more on psychological factors, so the demographic variables are integrated into the model in terms of controlled variables, in order to better affirm the causal nature of the psychological variables. Therefore, this study does not provide hypotheses for them.
Figure 1: Research model on intention to purchase voluntary social insurance
3. Research Methodology
The analytical methods used in this study are descriptive statistics to have an overall assessment of all factors, as well as test Cronbach's Alpha coefficient, analyze discovery factors to build and test scales of these analyzes were carried out with the help of SPSS software. Also, the study also used AMOS software to test the reliability, discriminant value, convergence value, the uniqueness of concepts and scales, and test hypotheses and tissue suitability. Figure in the study by Structural Equation Model (SEM).
Participants
From a total of 240 respondents, 109 (45.42%) respondents are male, and 131 (54.28%) are female. The 31-40 age group represents 40.42% of the respondents and 41-50 age group represents 25.83%. Most of the respondents have finished their high school (37.92%, n = 91). The respondents’ monthly income ranged mainly from VND 5 - 9 millions (35.84%) to 9 – 15 millions (27.08%).
The Current Situation of Participating in Voluntary Social Insurance
The current situation of the respondents in participating in voluntary social insurance is presented in Table 1.
Table 1: The current situation of participating in voluntary social insurance Frequency Percentage
Status of participating Not participate 157 65.42
Have been participating 83 34.58
Reasons for not participating
Low / unstable income 53 33.76
Unclear about the voluntary social insurance
policy 61 38.85
Not knowing about voluntary social
insurance 24 15.29
No demand to participate in voluntary social
insurance 19 12.1
Status of participation in voluntary social
insurance
Have stopped participating 27 32.53
Still participating 56 67.47
Reasons for stop participating
Unstable income source 11 40.74
The policy of voluntary social insurance is
not good 3 11.11
No longer need to participate in voluntary
social insurance 8 29.63
Voluntary social insurance does not bring
many benefits 5 18.52
4. Results
Table 2: Construct validity Construct Item Average
value
Standard deviation
Corrected Item-Total Correlation
Cronbach’s Alpha if item
Deleted
Cronbach’s Alpha Moral
Responsibility
MR1 3.65 1.204 0.852 0.664
0.793
MR2 2.80 1.410 0.010 0.925
MR3 3.51 1.261 0.743 0.697
MR4 3.59 1.265 0.718 0.706
MR5 3.53 1.280 0.749 0.694
Understanding UN1 3.67 1.076 0.785 0.718
0.798
UN2 3.65 1.165 0.688 0.736
UN3 2.78 1.226 0.448 0.791
UN4 3.55 1.216 0.631 0.748
UN5 3.62 1.258 0.680 0.735
UN6 2.52 1.316 0.192 0.851
Attitude ATT1 2.58 .834 0.853 0.743
0.840
ATT2 2.50 1.086 0.624 0.819
ATT3 2.63 1.124 0.627 0.820
ATT4 2.64 1.137 0.650 0.810
State’s Support SS1 1.85 0.884 0.904 0.837
0.893
SS2 1.98 1.023 0.674 0.883
SS3 2.06 1.053 0.730 0.871
SS4 2.02 1.012 0.703 0.877
SS5 2.03 1.024 0.702 0.877
Customer Consulting
CCS1 2.84 .906 0.850 0.679
0.756
CCS2 2.81 1.156 0.628 0.700
CCS3 2.80 1.237 0.638 0.696
CCS4 2.82 1.246 0.672 0.689
CCS5 2.91 1.186 0.675 0.690
CCS6 2.81 1.444 -0.074 0.832
CCS7 2.88 1.201 0.643 0.696
CCS8 2.95 1.412 0.031 0.812
Intention INT1 3.59 1.102 0.871 0.798
0.898
INT2 3.47 1.210 0.774 0.878
INT3 3.46 1.192 0.759 0.889
Table 2 above summarizes the descriptive statistics and the reliability of the variables in the research model. The results showed that 6 observed variables all have Cronbach’s Alpha index> 0.7, satisfying conditions of good reliability given by Hair et al. (1998) . Furthermore, observing the summary table, it can be seen that when removing MR2, UN6, CCS6, CCS8, the variables including these questions tended to increase their reliability.
Therefore, the above questions are excluded from the research model.
Exploratory Factor Analysis (EFA)
The EFA method was used to understand the underlying relationship of the factors before going to the SEM for testing of the suggested model and hypotheses.
Table 3: KMO and Bartlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.824
Bartlett’s Test of Sphericity
Approx. Chi-Square 4332.938
df 300
Sig. .000
As shown on Table 3, the KMO index measuring the appropriateness of sampling is 0.824 (satisfying the condition of 0.5 ≤ 0.824 ≤ 1) and the value of the significance of Bartlett’s Test of Sphericity test is 0, satisfies the condition (0.000 < 0.05) in which it is significant for the EFA to be considered as fitting (J. Hair et al., 2010)
Table 4: EFA Pattern Matrix
Construct Item Factor Loading Cronbach’s Alpha
Moral Responsibility
MR1 0.988
0.925
MR3 0.829
MR4 0.824
MR5 0.837
Understanding
UN1 0.990
0.905
UN2 0.767
UN4 0.773
UN5 0.854
Attitude
ATT1 0.952
0.819
ATT3 0.739
ATT4 0.712
State’s Support SSP1 0.983 0.893
SSP2 0.720
SSP3 0.774
SSP4 0.770
SSP5 0.742
Customer Consulting
CCS1 0.972
0.904
CCS2 0.707
CCS3 0.773
CCS4 0.775
CSS5 0.799
CSS7 0.739
Intention
INT1 0.970
0.898
INT2 0.851
INT3 0.764
Extraction Method: Principal Axis Factoring.
Rotation Method: Promax with Kaiser Normalization.
a. Rotation converged in 6 iterations.
Table 4 represents the results of the pattern matrix of EFA. Factor loadings > 0.7, as identified by J. Hair et al. (2010), indicate different factor structure. This research used 0.7 as a cutoff value for factor loadings. Because of that, UN3 and ATT2 are removed due to their factor loading are smaller than 0.7.
Confirmatory Factor Analysis (CFA)
The measurement model's overall goodness of fit was assessed using the model fit indices listed in Table 5
Table 5: Goodness of fit indicator of CFA
Measure Estimate Recommended value
(J. Hair et al., 2010) Interception χ2/df 1.083 (χ2 = 281.464, df = 260) 1 < χ2/df ≤ 2 Good fit
GFI 0.918 ≥ 0.9 Good fit
CFI 0.995 ≥ 0.9 Good fit
TLI 0.994 ≥ 0.9 Good fit
RMSEA 0.019 ≤ 0.03 Excellent fit
χ2/df = Chi-square / degrees of freedom GFI = Goodness of fit index
CFI = Comparative fit index TLI = Tucker-Lewis index
RMSEA = Root mean square error of approximation