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Did a Successful Fight against COVID-19 Come at a Cost? Impacts of the Pandemic on Employment Outcomes in Vietnam

Hai-Anh Dang (), Cuong Nguyen () and Calogero Carletto ()

No 607, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: Little evidence exists on the adverse effects of COVID-19 on the labor market for poorer countries. Despite its low middle-income status, Vietnam has been widely praised for its success in the fight against early waves of the COVID-19 pandemic, with a low mortality rate of around 100 deaths out of a population of less than 100 million by the end of 2020. We rigorously estimate the pandemic effects on employment outcomes in Vietnam, applying difference-in-differences and regression discontinuity design models to rich individual-level data from the Labor Force Surveys spanning 2015 to 2020. We find post-pandemic increased unemployment and temporary layoff rates and decreased employment quality. Monthly wages reduced but the proportion of workers receiving below-minimum wages substantially increased, contributing to sharply rising wage inequality. Our findings suggest that more resources can be allocated to protect vulnerable workers, especially as the pandemic prolongs and likely results in more severe damages to the economy.

Keywords: COVID-19; employment; wage inequality; differences-in-differences; RDD; Vietnam (search for similar items in EconPapers)
JEL-codes: E24 I30 J21 O12 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2022-03
New Economics Papers: this item is included in nep-mac, nep-sea and nep-tra
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Handle: RePEc:inq:inqwps:ecineq2022-607