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Trade liberalization, labor allocation and income dynamics in Vietnam

Abstract : The objectives of the current thesis are to investigate evolutions of the labor market since Doi Moi and impacts from the international integration of Vietnam’s economy, with focuses on a distinction of formal and informal sectors. In the current state of the thesis, the impacts of the trade liberalization and the increases in the minimum wages of the domestic sectors are studied. Indeed, the latter factor, the increase in the minimum wages, can be also considered as a factor relating to the international integration as it followed Viet Nam’s commitments under the WTO accession. For the impacts of the trade liberalization, the thesis investigates the impacts on labor allocations between different types of employments including wage work in the formal sectors and household businesses as well as self-employments in manufacturing sectors. The impacts on income differentials across the types of employments are also exploited. For the impacts of the increases in the minimum wages, the thesis exploits the effects on the total employments, movements between the formal sectors and other types of employments, wage distributions within the formal and informal sectors and wage gaps between the two sectors at different percentiles. Chapter 1. Trade liberalization, labor allocation and income dynamics in Vietnam Abstract This study seeks to answer two inter-related questions for Viet Nam: (i) how trade liberalization affects the allocation of workers across self-employment, wage work in household businesses and wage work in the formal sector (private, foreign invested and state enterprises); and (ii) income differentials between these kinds of employment. An extension of the two-step model in Goldberg and Pavcnik (2003) and its modification are employed to answer the questions. Data is sourced from five Viet Nam Household Living Standard Surveys from 2002 to 2010 and available measures of the trade liberalization in Viet Nam. The results indicate that the trade liberalization does not have significant impacts on income differentials between types of employments. Meanwhile, increases in exposing to the international trade reduce wage works in household businesses, compared with that in the formal sectors. The increase in the trade liberalization also has impacts on self-employments but it seems that the directions of impacts depend on statues of net import or net export of industries of Viet Nam. Chapter 2. Impacts of unification of minimum wages across sectors on labor allocations and income dynamics in Vietnam Abstract Rates of minimum wages in Viet Nam have increased drastically since 2009 as commitments of unification between those in FDI and domestic sectors under the WTO accession. This growth has been considered as being higher to productivity growth of the economy. Employing data of Vietnam Labor Force Surveys and Household Living Standard Surveys from 2010 to 2014, the current paper investigates impacts of the minimum wages on employment statues, wage distributions in formal and informal sectors as well as wage gap between the two sectors. The results imply that the minimum wages do not have significant impacts on the total employments of the whole population. This result is somewhat different from those reported in previous studies for Viet Nam. Our different specifications detect that the differences in the results are attributed to inclusions of trends in studying. Similar to the work of Hansen et al. (2015), the results indicates that that the minimum wages positively affects the wage distribution in the formal sectors. However, we find that the effects do not stop at the median as the result of Hansen et al. but also on higher percentiles. Finally, the minimum wages increases the wage gap between the formal and informal sectors with stronger effects at higher percentiles of the wage distribution.
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Submitted on : Monday, April 1, 2019 - 1:07:07 PM
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  • HAL Id : tel-02086452, version 1



Hoang Dat Vu. Trade liberalization, labor allocation and income dynamics in Vietnam. Economics and Finance. Université Paris sciences et lettres, 2018. English. ⟨NNT : 2018PSLED050⟩. ⟨tel-02086452⟩



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