Trade Liberalization and Labor Market Adjustments in Vietnamese Manufacturing

Pham Dinh Long, Pham Thi Bich Ngoc and Holger Gorg
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Pham Dinh Long: Ton Duc Thang University, Vietnam
Pham Thi Bich Ngoc: Hoa Sen University, Vietnam
Holger Gorg: Kiel Institute for the World Economy; University of Kiel and CEPR

No 169, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: Using both industry and firm level data sets during the period 2003-2008, this paper provides the first comprehensive investigation of the impact of trade liberalization on employment and wages in Vietnamese manufacturing. Overall, we find empirical evidence that trade liberalization has a negative effect on employment and wages. However, the impact magnitude is modest with a decline within 2.4%-3.5% in real wages and 0.76% and 0.17% reductions in industry and firm employment respectively on average over the period. We further investigate the effects of trade liberalization on gender and skill earning gaps and the role of trade unions by location. The analysis shows that trade liberalization appears to reduce the gender and skill earnings differentials.

Pages: 38 pages
Date: 2014
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Published in Emerging Markets Finance and Trade, 2021, 57(6), pages 1828-1841.

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https://doi.org/10.1080/1540496x.2019.1643316 Published version, 2021
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