Dynamics of wage inequality over the prolonged economic transformation: The case of Vietnam

Tinh Doan, Van Ha, Tuyen Tran and Judy Yang

Economic Analysis and Policy, 2023, vol. 78, issue C, 816-834

Abstract: This study explores changes in wage inequality in Vietnam during a prolonged period of economic transformation. We found that wage inequality increased in the earlier period of 1998–2010, but declined considerably in the following period of 2010–2020. The change in economic structure and increased supply of higher educated workforce have substantially contributed to changing wage inequality. Overall changes in increasing wage inequality over the former period was mainly due to changes in labor market, job and workers’ observed characteristics. In the latter period, however, the decline in wage inequality was related to changes in the returns to job and workers’ observed characteristics. A rapid rise in supply of higher educated workers, which exceeded the demand for skilled labor, in the later stage of economic transformation also contributed to declining returns to education and the decline in wage inequality.

Keywords: Economic transformation; Skilled labor supply; Wage inequality; RIF- decomposition (search for similar items in EconPapers)
JEL-codes: I26 J22 J31 P21 P30 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:78:y:2023:i:c:p:816-834

DOI: 10.1016/j.eap.2023.04.029

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