Education, Health, and Wages:Evidence from Vietnam

Thu Nguyen, Tinh Doan, Maria Santana and Huong Pham
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Thu Nguyen: Mekong Development Research Institute
Maria Santana: University of East Anglia
Huong Pham: University of Economics, Ho Chi Minh City

Adelaide Economics Working Papers from Adelaide University, School of Economics

Abstract: This paper examines the joint role of education and health in wage determination and labour-force participation among Vietnamese working-age individuals, using pooled 2014-2020 Viet Nam Household Living Standards Survey data and a health-augmented Mincerian framework with Heckman selection correction. Comparing hourly and monthly wage specifications reveals a severity gradient in the healthrelated wage penalty: under the broad morbidity measure, poor health reduces monthly earnings by approximately 9% with no significant hourly wage effect, consistent with a reduction in working time; under the narrower bedridden-days measure of poor health, poor health also reduces hourly wages by approximately 7%, alongside a larger monthly wage penalty of approximately 16%, consistent with a productivity loss due to poor health among those who remain at work. Education does not significantly moderate the wage penalty but is positively associated with labour-force participation among severely ill individuals. Returns to education range from approximately 4.5% to 4.8% per additional year. The findings suggest that the economic cost of poor health in Viet Nam is severity-dependent and operates partly through labour-force attachment, with implications for policies addressing paid sick leave and social health insurance.

Keywords: Returns to education; Health; Wage penalty; Heckman selection; Viet Nam (search for similar items in EconPapers)
Date: 2026-09
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Persistent link: https://EconPapers.repec.org/RePEc:adl:wpaper:2026-12

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