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Moving out of Agriculture: Structural Change in Vietnam

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  • Brian McCaig
  • Nina Pavcnik

Abstract

We examine the role of structural change in the economic development of Vietnam from 1990 to 2008. Structural change accounted for a third of the growth in aggregate labor productivity during this period, which averaged 5.1 percent per annum. We discuss the role of reforms in agriculture, enterprises, and international integration in this process. In addition to the drastic move of employment away from agriculture toward services and manufacturing, we also document the movement of workers away from household businesses toward firms in the enterprise sector, and the reallocation of workers from state owned firms toward private domestic and foreign owned firms. Manufacturing experienced particularly rapid growth in labor productivity and a large expansion of employment, as it grew from 8 to 14 percent of the workforce. Changes in trade policy, expansion of employment in foreign owned firms, and the declining role of state owned enterprises robustly contributed toward the changing structure of employment within manufacturing.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19616.

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Date of creation: Nov 2013
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Handle: RePEc:nbr:nberwo:19616

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References

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  1. Rudolfs Bems & Robert C. Johnson, 2012. "Value-Added Exchange Rates," NBER Working Papers 18498, National Bureau of Economic Research, Inc.
  2. Rafael La Porta & Andrei Shleifer, 2008. "The Unofficial Economy and Economic Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 275-363.
  3. Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
  4. Paul Glewwe & Nisha Agrawal & David Dollar, 2004. "Economic Growth, Poverty, and Household Welfare in Vietnam," World Bank Publications, The World Bank, number 15010, August.
  5. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, Elsevier, vol. 72(2), pages 463-496, December.
  6. Chang-Tai Hsieh & Peter Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," Working Papers, Center for Economic Studies, U.S. Census Bureau 09-04, Center for Economic Studies, U.S. Census Bureau.
  7. Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
  8. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, Econometric Society, vol. 71(6), pages 1695-1725, November.
  9. Ravallion, Martin & van de Walle, Dominique, 2008. "Does rising landlessness signal success or failure for Vietnam's agrarian transition?," Journal of Development Economics, Elsevier, Elsevier, vol. 87(2), pages 191-209, October.
  10. Mike Waugh & David Lagakos & Doug Gollin, 2011. "The Agricultural Productivity Gap in Developing Countries," 2011 Meeting Papers 1397, Society for Economic Dynamics.
  11. Brian, McCaig, 2011. "Exporting out of poverty: Provincial poverty in Vietnam and U.S. market access," Journal of International Economics, Elsevier, Elsevier, vol. 85(1), pages 102-113, September.
  12. McMillan, Margaret & Rodrik, Dani, 2012. "Globalization, structural change, and productivity growth:," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1160, International Food Policy Research Institute (IFPRI).
  13. Prema-chandra Athukorala, 2006. "Trade Policy Reforms and the Structure of Protection in Vietnam," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 29(2), pages 161-187, 02.
  14. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 45(1), pages 39-82, March.
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Cited by:
  1. Nguyen, Huy, 2014. "The effect of land fragmentation on labor allocation and the economic diversity of farm households: The case of Vietnam," MPRA Paper 57521, University Library of Munich, Germany.
  2. Becker, Dennis, 2014. "Heterogeneous Firms and Informality: The Effects of Trade Liberalization on Labor Markets," Working Papers, Cornell University, Department of Applied Economics and Management 180124, Cornell University, Department of Applied Economics and Management.
  3. Dani Rodrik, 2014. "An African Growth Miracle?," NBER Working Papers 20188, National Bureau of Economic Research, Inc.
  4. Jinjarak, Yothin & Mutuc, Paulo Jose & Wignaraja, Ganeshan, 2014. "Does Finance Really Matter for the Participation of SMEs in International Trade? Evidence from 8,080 East Asian Firms," ADBI Working Papers, Asian Development Bank Institute 470, Asian Development Bank Institute.
  5. Nguyen, Huy, 2014. "The effect of land fragmentation on labor allocation and the economic diversity of farm households: The case of Vietnam," MPRA Paper 57643, University Library of Munich, Germany.

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