Trade Liberalization and Human Capital Investment: 20 Years of Evidence from Vietnam

Manh-Duc Doan

No 197, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: Exploiting a quasi-natural experiment–the Vietnam-U.S. Bilateral Trade Agreement (BTA)–I investigate the impact of trade liberalization on children's human capital investment in Vietnam. Using regional variation in export tariff uncertainty due to the BTA, I find that children in provinces more exposed to tariff reductions were more likely to engage in work rather than attend school, and this effect persisted for 20 years after the BTA. Additionally, the effects were more pronounced among boys, older children, rural children, and those with less-educated parents. These negative effects are driven by the increase in job opportunities, i.e., the child labor incidence, and the wage premium in the higher exposure provinces. The findings indicate that trade liberalization has increased the opportunity cost of education. These results remain robust across various alternative estimations.

Keywords: trade agreement; tariff reduction; schooling; child labor; Vietnam (search for similar items in EconPapers)
JEL-codes: F14 F16 J24 O12 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://depocenwp.org/modules/download/index.php?id=197 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dpc:wpaper:0197

Access Statistics for this paper

More papers in Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam Contact information at EDIRC.
Bibliographic data for series maintained by Doan Quang Hung ().