Services imports and labour in Viet Nam

Alexander Jaax, Louise Johannesson and Thi Xuan Thu Nguyen
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Alexander Jaax: OECD
Louise Johannesson: OECD
Thi Xuan Thu Nguyen: Diplomatic Academy of Viet Nam

No 241, OECD Trade Policy Papers from OECD Publishing

Abstract: This paper draws on detailed firm-level and worker-level information to explore the link between services imports and employment dynamics in the case of Viet Nam. The econometric analysis consists of two parts. First, data covering formal firms are exploited to investigate the relationship between sector-level services import intensity and firm-level employment and firm-level average wages. The second part is conducted at the level of workers and also covers informal workers. The results show that sector-level services import intensity positively affects firm-level average wages of Vietnamese formal services firms, whereas a small negative effect on firm-level employment is observed. For manufacturing firms, there is no conclusive evidence regarding the association between services import intensity and firm-level employment. The worker-level analysis identifies a positive wage effect of occupation-level exposure to services imports on domestic workers in foreign-owned businesses in all sectors. The results also suggest that higher skilled workers might be more likely to benefit from services imports. This paper provides support for an approach that combines an emphasis on lowering firms’ costs of sourcing foreign services inputs with efforts to strengthen SMEs’ capabilities and improve workers’ skills.

Keywords: employment; individual and firm-level data; trade; wages; worker heterogeneity (search for similar items in EconPapers)
JEL-codes: C26 F14 F16 F61 J21 J30 (search for similar items in EconPapers)
Date: 2020-10-23
New Economics Papers: this item is included in nep-cse, nep-eff, nep-int, nep-lma, nep-sbm and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:241-en

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