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The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam

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  • Nguyen Viet, Cuong

Abstract

This study provides empirical evidence on the impact of a minimum wage increase on employment, wages, and expenditures of workers in the formal sector who have wages below the minimum level in Vietnam. Using the difference-in-differences with propensity score matching and Vietnam Household Living Standard Surveys 2004 and 2006, the paper finds that the minimum wage increase reduced employment of low-wage workers in the formal sector. However, workers who lost formal sector jobs were able to find jobs in the informal sector. The effect of the minimum wage increase on wages and expenditures of workers is not statistically significant.

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File URL: http://mpra.ub.uni-muenchen.de/36751/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36751.

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Date of creation: 20 Dec 2010
Date of revision: 15 Aug 2011
Handle: RePEc:pra:mprapa:36751

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Related research

Keywords: Minimum wage; employment; income; Vietnam; difference-in-differences; propensity score matching;

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References

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  1. Richard Dickens & Stephen Machin & Alan Manning & David Metcalf & Jonathan Wadsworth & S Woodland, 1994. "The Effect of Minimum Wages on UK Agriculture," CEP Discussion Papers dp0204, Centre for Economic Performance, LSE.
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  3. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
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  6. Sara Lemos, 2004. "Minimum Wage Policy and Employment Effects: Evidence from Brazil," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  7. Richard Dickens & Stephen Machin & Alan Manning, 1994. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," CEP Discussion Papers dp0183, Centre for Economic Performance, LSE.
  8. Neumark, David & Wascher, William, 2007. "Minimum Wages and Employment," IZA Discussion Papers 2570, Institute for the Study of Labor (IZA).
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  13. Neumark, David & Wascher, William, 2003. "Minimum wages and skill acquisition: another look at schooling effects," Economics of Education Review, Elsevier, vol. 22(1), pages 1-10, February.
  14. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
  15. Burkhauser, Richard V & Couch, Kenneth A & Wittenburg, David C, 2000. "A Reassessment of the New Economics of the Minimum Wage Literature with Monthly Data from the Current Population Survey," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 653-80, October.
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  17. repec:fth:coluec:9899-01 is not listed on IDEAS
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Citations

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Cited by:
  1. Nguyen, Cuong, 2012. "Do Minimum Wages Affect Firms’ Labor and Capital? Evidence from Vietnam," MPRA Paper 48656, University Library of Munich, Germany.
  2. Cuong Nguyen, 2012. "Do minimum wage increases cause inflation? evidence from vietnam," Economics Bulletin, AccessEcon, vol. 32(1), pages A9.
  3. Del Carpio, Ximena & Messina, Julián & Sanz-de-Galdeano, Anna, 2014. "Minimum Wage: Does It Improve Welfare in Thailand?," IZA Discussion Papers 7911, Institute for the Study of Labor (IZA).

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