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The Impact of Trade Liberalization on the Return to Education in Vietnam: Wage versus Employment Effect


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  • Remco H. Oostendorp

    (VU University Amsterdam, the Netherlands)

  • Doan Hong Quang

    (World Bank Country Office, and Centre for Analysis and Forecasting (CAF), Vietnam)


Several studies have identified the impact of trade liberalization in developing countries on the return to education within a Mincerian framework through a difference-in-difference estimator or with industry-level measures of trade openness. These studies have typically estimated the return to education in terms of changes in wages rather than employment, effectively ignoring the fact that trade liberalization affects not only wages but also employment opportunities. In this paper we use four large-scale representative household surveys from Vietnam for the period 1998-2006 to estimate the impact of trade liberalization on the return to education taking into account both changes in wages and employment. The results show that the impact was large in Vietnam but is severely underestimated if changes in employment opportunities are ignored.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 11-060/3.

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Date of creation: 28 Mar 2011
Date of revision: 04 Apr 2011
Handle: RePEc:dgr:uvatin:20110060

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Keywords: trade liberalization; return to education; employment; Vietnam;

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  1. Pham, Hung T & Reilly, Barry, 2007. "The Gender Pay Gap In Vietnam, 1993-2002: A Quantile Regression Approach," MPRA Paper 6475, University Library of Munich, Germany.
  2. Prema-chandra Athukorala, 2006. "Trade Policy Reforms and the Structure of Protection in Vietnam," The World Economy, Wiley Blackwell, vol. 29(2), pages 161-187, 02.
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