IDEAS home Printed from https://ideas.repec.org/a/ssi/jouesi/v6y2019i3p1139-1155.html
   My bibliography  Save this article

Role of Unemployment insurance in Sustainable development in Vietnam: Overview and policy implication

Author

Listed:
  • Le Thanh Tung

    (Ho Chi Minh City Open University, Vietnam)

Abstract

Unemployment insurance is one of the social policies that have received much attention from economists in many countries over the past decades. Since 1986, the Vietnamese economy was shifted from the centrally-planned economy to a market one leading to a very fast development of the labor market. Having a young population structure, so the unemployment problem and unemployment insurance policy had considered and recognized as the important social issues in this country. In Vietnam, the unemployment insurance policy is an important part of the Social Insurance Law, promulgated in 2008. Our paper aims to analyze the role of unemployment insurance in Vietnam since this policy officially began in 2009. The Vietnamese government has some targets in the formation of the unemployment insurance fund is the maintenance of regular compulsory contributions of parties to labor relations in combination with public budget supports, focusing on creating a stable financial funding for unemployment insurance regime in the long run. Our regression results using the Ordinary Least Squares (OLS) method and the analysis descriptive statistics show that the unemployment insurance policy has a positive effect on reducing faster and stabilizer the unemployment rate of the Vietnamese economy (this policy have reduced the average unemployment rate by 0.66% per year since 2009). Furthermore, the unemployment insurance policy not only helps the unemployed people stabilize their lives but also provides more opportunities for them to faster continue participating in the labor market by many benefits including free counseling services, free employment placement services, free training services for unemployed people in Vietnam. The success of the unemployment insurance policy has been noted in reducing the number of labor strikes by softening the relationship between employers and their workers in Vietnam. Besides, the unemployment insurance policy will help reduce the fluctuations of the economic cycles automatically by increasing the aggregate demand by multiplier mechanic and contributes to support the economic growth in Vietnam in the period 2008-2010. We can conclude the benefits of unemployment insurance help the development of Vietnamese society towards sustainability in the long run. Finally, the article also suggested some policy implications for the policymakers to have a better control the unemployment as well as stabilize the labor market in Vietnam in the future.

Suggested Citation

  • Le Thanh Tung, 2019. "Role of Unemployment insurance in Sustainable development in Vietnam: Overview and policy implication," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(3), pages 1139-1155, March.
    • Handle: RePEc:ssi:jouesi:v:6:y:2019:i:3:p:1139-1155
    DOI: 10.9770/jesi.2019.6.3(6)
    as

    Download full text from publisher

    File URL: https://jssidoi.org/jesi/uploads/articles/23/Tung_Role_of_Unemployment_insurance_in_Sustainable_development_in_Vietnam_Overview_and_policy_implication.pdf
    Download Restriction: no
    File URL: https://jssidoi.org/jesi/article/275
    Download Restriction: no
    File URL: https://libkey.io/10.9770/jesi.2019.6.3(6)?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bertil Holmlund, 1998. "Unemployment Insurance in Theory and Practice," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 113-141, March.
    2. Hamermesh, Daniel S, 1980. "Unemployment Insurance and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(3), pages 517-527, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andreas Pollak, 2008. "Optimal Unemployment Insurance with Variable Skill Levels," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(4), pages 696-726, December.
    2. Robalino, David & Vodopivec, Milan & Bodor, Andras, 2009. "Savings for unemployment in good or bad times : options for developing countries," Social Protection Discussion Papers and Notes 50320, The World Bank.
    3. Tomi Kyyrä, 2023. "The effects of unemployment assistance on unemployment exits," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(6), pages 1457-1480, December.
    4. Brigitte Dormont & Denis Fougère & Ana Prieto, 2001. "L'effet de l'allocation unique dégressive sur la reprise d'emploi," Économie et Statistique, Programme National Persée, vol. 343(1), pages 3-28.
    5. Etienne Lehmann & Bruno Van Der Linden, 2007. "On the Optimality of Search Matching Equilibrium When Workers Are Risk Averse," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(5), pages 867-884, October.
    6. Isabelle Lebon & Thérèse Rebière, 2018. "How many educated workers for your economy? European targets, optimal public spending, and labor market impact," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 17(1), pages 1-44, March.
    7. Malherbet, Franck & L'Haridon, Olivier, 2002. "Unemployment Compensation Finance and Aggregate Employment Fluctuations," CEPR Discussion Papers 3614, C.E.P.R. Discussion Papers.
    8. Thomas Beissinger & Oliver Büsse, 2001. "Bismarck versus Beveridge: Which Unemployment Compensation System is more Prone to Labor Market Shocks?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 58(1), pages 78-102, December.
    9. Olivier, PIERARD, 2004. "Impact of Selective Reductions in Labor Taxation," LIDAM Discussion Papers IRES 2004035, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    10. Konstantinos Tatsiramos & Jan C. Ours, 2014. "Labor Market Effects Of Unemployment Insurance Design," Journal of Economic Surveys, Wiley Blackwell, vol. 28(2), pages 284-311, April.
    11. Gavrel, Frédéric, 2011. "On the efficiency of participation with vertically differentiated workers," Economics Letters, Elsevier, vol. 112(1), pages 100-102, July.
    12. Mohl, Philipp & Hagen, Tobias, 2011. "Do EU structural funds promote regional employment? Evidence from dynamic panel data models," Working Paper Series 1403, European Central Bank.
    13. Saarela, Jan, 2006. "Replacement rates and labour market behaviour," Socio-Economic Planning Sciences, Elsevier, vol. 40(3), pages 187-211, September.
    14. Hertweck Matthias Sebastian, 2013. "Strategic wage bargaining, labor market volatility, and persistence," The B.E. Journal of Macroeconomics, De Gruyter, vol. 13(1), pages 123-149, October.
    15. Helge Bennmarker & Kenneth Carling & Bertil Holmlund, 2007. "Do Benefit Hikes Damage Job Finding? Evidence from Swedish Unemployment Insurance Reforms," LABOUR, CEIS, vol. 21(1), pages 85-120, March.
    16. Gilles Joseph & Thomas Weitzenblum, 2003. "Optimal Unemployment Insurance: Transitional Dynamics vs. Steady State," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(4), pages 869-884, October.
    17. Margolis, David N. & Navarro, Lucas & Robalino, David A., 2012. "Unemployment Insurance, Job Search and Informal Employment," IZA Discussion Papers 6660, Institute of Labor Economics (IZA).
    18. Sachs, Andreas, 2010. "A Bayesian approach to determine the impact of institutions on the unemployment rate," ZEW Discussion Papers 10-058, ZEW - Leibniz Centre for European Economic Research.
    19. Ding, Hong, 2012. "Is government’s help for unemployed people helpful for the society? An Empirical Study on Macro Data of Public Unemployment Spending in OECD Nations," MPRA Paper 43132, University Library of Munich, Germany.
    20. Sahin Avcioglu & Bilgehan Karabay, 2020. "Labor market regulation under self‐enforcing contracts," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(6), pages 1965-2018, December.

    More about this item

    Keywords

    unemployment; unemployment insurance; public policy; social policy; social security; labor force; labor market; sustainable development; strike; worker benefit; Vietnam;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ssi:jouesi:v:6:y:2019:i:3:p:1139-1155. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Manuela Tvaronaviciene (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.