Decomposing wage inequality: Public and private sectors in Vietnam 1993-2006
AbstractThis paper studies the labor market in Vietnam during the transition towards market economy (1993-2006): we show that the public-private sector wage gap markedly increased, but that wage inequality decreased overall. Our aim is to assess how much of this evolution can be explained by workers' productive skills and their allocation between sectors. We use a simple, yet innovative, method that allows us to take into account workers' unobservable characteristics and their remuneration in each sector. Throughout the period we consider, public sector workers are more skilled than private sector workers. However, rising returns to workers' skills in the public sector play a major role in the increase of the public-private sector gap. Against all expectations, the public sector grew richer as Vietnam moved towards market economy. Finally, a greater homogeneity among labor market participants seems to explain the overall decline in wage inequality.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series Working Papers with number halshs-00564653.
Date of creation: Feb 2011
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00564653
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
transition ; inequality decomposition ; public sector;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-19 (All new papers)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-DEV-2011-02-19 (Development)
- NEP-LAB-2011-02-19 (Labour Economics)
- NEP-TRA-2011-02-19 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Iyigun, Murat & Rodrik, Dani, 2004.
"On the Efficacy of Reforms: Policy Tinkering, Institutional Change and Entrepreneurship,"
CEPR Discussion Papers
4399, C.E.P.R. Discussion Papers.
- Murat Iyigun & Dani Rodrik, 2004. "On the Efficacy of Reforms: Policy Tinkering, Institutional Change, and Entrepreneurship," NBER Working Papers 10455, National Bureau of Economic Research, Inc.
- Glinskaya, Elena & Lokshin, Michael, 2005.
"Wage differentials between the public and private sector in India,"
Policy Research Working Paper Series
3574, The World Bank.
- Elena Glinskaya & Michael Lokshin, 2007. "Wage differentials between the public and private sectors in India," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(3), pages 333-355.
- Azam, Mehtabul & Prakash, Nishith, 2010. "A Distributional Analysis of the Public-Private Wage Differential in India," IZA Discussion Papers 5132, Institute for the Study of Labor (IZA).
- Amanda Gosling & Thomas Lemieux, 2001.
"Labour Market Reforms and Changes in Wage Inequality in the United Kingdom and the United States,"
NBER Working Papers
8413, National Bureau of Economic Research, Inc.
- Amanda Gosling & Thomas Lemieux, 2004. "Labor Market Reforms and Changes in Wage Inequality in the United Kingdom and the United States," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 275-312 National Bureau of Economic Research, Inc.
- Bargain, Olivier & Melly, Blaise, 2008. "Public Sector Pay Gap in France: New Evidence Using Panel Data," IZA Discussion Papers 3427, Institute for the Study of Labor (IZA).
- Lemieux, Thomas, 1998. "Estimating the Effects of Unions on Wage Inequality in a Panel Data Model with Comparative Advantage and Nonrandom Selection," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 261-91, April.
- José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
- Siminski, Peter, 2008. "What Would the Average Public Sector Employee be Paid in the Private Sector?," Economics Working Papers wp08-05, School of Economics, University of Wollongong, NSW, Australia.
- Martin Painter, 2005. "The Politics of State Sector Reforms in Vietnam: Contested Agendas and Uncertain Trajectories," Journal of Development Studies, Taylor & Francis Journals, vol. 41(2), pages 261-283.
- Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 1999. "When Does Privatization Work? The Impact Of Private Ownership On Corporate Performance In The Transition Economies," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1153-1191, November.
- Richard Disney & Amanda Gosling, 1998. "Does it pay to work in the public sector?," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 347-374, November.
- Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
- Bales, Sarah & Rama, Martin, 2001. "Are public sector workers underpaid? - Appropriate comparators in a developing country," Policy Research Working Paper Series 2747, The World Bank.
- Belser, Patrick & Rama, Martin, 2001. "State ownership and labor redundancy - estimates based on enterprise-level data from Vietnam," Policy Research Working Paper Series 2599, The World Bank.
- Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 995-1025, November.
- Keane, Michael P. & Prasad, Eswar S., 2006.
"Changes in the structure of earnings during the Polish transition,"
Journal of Development Economics,
Elsevier, vol. 80(2), pages 389-427, August.
- Keane, Michael P. & Prasad, Eswar, 2002. "Changes in the Structure of Earnings During the Polish Transition," IZA Discussion Papers 496, Institute for the Study of Labor (IZA).
- Eswar Prasad & Michael P. Keane, 2002. "Changes in the Structure of Earnings During the Polish Transition," IMF Working Papers 02/135, International Monetary Fund.
- Amy Liu, 2004. "Sectoral gender wage gap in Vietnam," Oxford Development Studies, Taylor & Francis Journals, vol. 32(2), pages 225-239.
- Phan, Diep & Coxhead, Ian A., 2012.
"Long-run costs of piecemeal reform: wage inequality and returns to education in Vietnam,"
2012 Annual Meeting, August 12-14, 2012, Seattle, Washington
124207, Agricultural and Applied Economics Association.
- Phan, Diep & Coxhead, Ian, 2012. "Long-Run Costs of Piecemeal Reform: Wage Inequality and Returns to Education in Vietnam," Staff Paper Series 566, University of Wisconsin, Agricultural and Applied Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.