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

Author

Listed:
  • Remco H. Oostendorp

    (VU University Amsterdam, the Netherlands)

  • Doan Hong Quang

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

Abstract

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.

Suggested Citation

  • Remco H. Oostendorp & Doan Hong Quang, 2011. "The Impact of Trade Liberalization on the Return to Education in Vietnam: Wage versus Employment Effect," Tinbergen Institute Discussion Papers 11-060/3, Tinbergen Institute, revised 04 Apr 2011.
    • Handle: RePEc:tin:wpaper:20110060
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    References listed on IDEAS

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    Cited by:

    1. Phan, Diep & Coxhead, Ian, 2013. "Long-run costs of piecemeal reform: Wage inequality and returns to education in Vietnam," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1106-1122.
    2. Alberto Chong & Carla Srebot, 2023. "Can Regional Trade Agreements Negatively Impact Primary Schooling?," Open Economies Review, Springer, vol. 34(2), pages 317-339, April.
    3. Ahmed Mohamed Ezzat, 2018. "Trade Openness: An Effective tool for Poverty Alleviation or an Instrument for Increasing Poverty Severity?," Working Papers 1248, Economic Research Forum, revised 07 Nov 2018.

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    More about this item

    Keywords

    trade liberalization; return to education; employment; Vietnam;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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