Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam

Huu Chi Nguyen (), Christophe Nordman and François Roubaud
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Huu Chi Nguyen: Centre of Economics, University Paris Nord (CEPN), DIAL, IRD, Paris

No DT/2011/15, Working Papers from DIAL (Développement, Institutions et Mondialisation)

Abstract: (english) In spite of its predominant economic weight in developing countries, little is known about the informal sector earnings structure compared to that of the formal sector. Taking advantage of the rich VHLSS dataset in Vietnam, in particular its three wave panel data (2002, 2004, 2006), we assess the magnitude of various formal-informal earnings gaps while addressing heterogeneity at three different levels: the worker, the job (wage employment vs. self-employment) and the earnings distribution. We estimate fixed effects and quantile regressions to control for unobserved individual characteristics. Our results suggest that the informal sector earnings gap highly depends on the workers’ job status and on their relative position in the earnings distribution. Penalties may in some cases turn into premiums. By comparing our results with studies in other developing countries, we draw conclusions highlighting the Vietnam’s labour market specificity. _________________________________ (français) En dépit d'un poids économique massif dans les pays en développement, on sait peu de choses sur la structure des revenus du secteur informel, notamment en comparaison du secteur formel. En tirant avantage de l'enquête VHLSS au Vietnam, et en particulier des trois vagues de données de panel (2002, 2004, 2006), nous examinons l'ampleur du différentiel de rémunération formel/informel en tenant compte de l'hétérogénéité à trois niveaux différents : celle des travailleurs, de leurs emplois (salariés vs non salariés) et de la distribution des revenus. Nous estimons des modèles à effets fixes (standards et régressions quantiles) permettant de contrôler les caractéristiques inobservables des individus. Nos résultats montrent que le différentiel de rémunération dépend fortement du statut dans l'emploi et de la position relative dans la distribution des revenus. Dans certains cas, le secteur informel apparaît plus rémunérateur. La comparaison avec les études réalisées dans d'autres PED permet de mettre en lumière les spécificités du marché du travail au Vietnam.

Keywords: Informal employment; earnings gap; transition matrix; quantile regressions; panel data; Vietnam. (search for similar items in EconPapers)
JEL-codes: J21 J23 J24 J31 O17 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2011-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Who Suffers the Penalty?: A Panel Data Analysis of Earnings Gaps in Vietnam (2013)
Working Paper: Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam (2013)
Working Paper: Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam (2013)
Working Paper: Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam (2011)
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