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Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002

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  • Pham, Hung T

Abstract

Vietnam’s rural economy has substantially diversified over the past two decades. The rural nonfarm sector has grown rapidly and became an important source of employment and income for rural households. This growing nonfarm employment was associated with radical changes in the trade policy reform that has put the country to the top two or three performers in the developing world. This paper examines the potential effect of the trade policy reform on nonfarm employment in rural Vietnam during the period 1993-2002. It proposes two trade openness indices that allow changes in the trade policy at the macro level to be transmitted to rural households. The results reveal that the trade policy reform does have a material impact on rural nonfarm employment. While a more liberalized agricultural sector encourages nonfarm diversification, a lower protection level in the nonfarm sector discourages individual participation in nonfarm income-generating activities.

Suggested Citation

  • Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:6476
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    1. Atamanov, Aziz & Van den Berg, Marrit, 2011. "Microeconomic analysis of rural nonfarm activities in the Kyrgyz Republic: What determines participation and returns?," MERIT Working Papers 2011-011, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    More about this item

    Keywords

    Trade liberalization; trade policy reform; rural nonfarm employment; Vietnam;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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