Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam

Christophe Nordman, Huu Chi Nguyen and François Roubaud

No 60, Proceedings of the German Development Economics Conference, Berlin 2011 from Verein für Socialpolitik, Research Committee Development Economics

Abstract: In spite of its predominant economic weight in developing countries, little is known about informal sector income dynamics vis-à-vis the formal sector. Some works have been done in this field using household surveys, but they only consider some emerging Latin American countries and a few African countries. As a matter of consequence, there is still no way to generalize the (diverging) results to other part of the developing world. Taking advantage of the rich VHLSS dataset in Vietnam, in particular its three waves panel data (2002, 2004, 2006), we assess the magnitude of various formal/informal earnings gaps while addressing heterogeneity issues at three different levels: the worker, the job (wage employment vs. selfemployment) and the earnings distribution.We estimate fixed effects and quantile regressions to control for unobserved individual characteristics. Our results suggest that the informal sector earnings gap highly depends on the workers' job status and on their relative position in the earnings distribution. Penalties may in some cases turn into premiums. By comparing our results with studies in other developing countries, we draw conclusions highlighting the Vietnam's labour market specificity.

Keywords: informal employment; earnings gap; transition matrix; quantile regressions; panel data; Vietnam (search for similar items in EconPapers)
JEL-codes: J21 J23 J24 J31 O17 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-dev, nep-iue, nep-lab, nep-lma and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Who Suffers the Penalty?: A Panel Data Analysis of Earnings Gaps in Vietnam (2013)
Working Paper: Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam (2013)
Working Paper: Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam (2013)
Working Paper: Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam (2011)
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