The Effect of Export Market Access on Labor Market Power: Firm-level Evidence from Vietnam

Trang T. Hoang, Devashish Mitra and Hoang Pham ()
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Trang T. Hoang: https://www.federalreserve.gov/econres/trang-t-hoang.htm
Hoang Pham: https://liberalarts.oregonstate.edu/users/hoang-pham

No 1394, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We examine the impact of an export market expansion created by the US-Vietnam Bilateral Trade Agreement (BTA) on labor market competition among Vietnamese manufacturing firms. We measure distortionary wedges between equilibrium marginal revenue products of labor (MRPL) and wages nonparametrically and find that the median firm pays workers 59% of their MRPL. The BTA permanently decreases labor market distortion in manufacturing by 3.4%, mainly for domestic private firms. The median distortion is 26% higher for women than men, and the decline in distortion for women drives the overall distortion reduction. We shed some light on the mechanisms for these results.

Keywords: International Trade; Export Market Access; Labor Market Distortion; Misallocation; Income Distribution; Labor Share; Gender Inequality; Monopsony; Oligopsony (search for similar items in EconPapers)
JEL-codes: F16 F63 J16 J42 O15 O24 (search for similar items in EconPapers)
Date: 2024-08-09
New Economics Papers: this item is included in nep-com, nep-int, nep-lab, nep-sea and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:1394

DOI: 10.17016/IFDP.2024.1394

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