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An investigation of the decline in the returns to higher education in Vietnam

Author

Listed:
  • Thi Hang Banh
  • Trang Hong Dao
  • Paul Glewwe
  • Giang Thai

Abstract

Vietnam’s economy and education system have had remarkable success in recent decades, yet there are concerns about the declining returns to higher education since 2008. We document this decline in returns to higher education and propose four hypotheses to explain it. Analysis of the VLSS/VHLSS and LFS data provides little evidence for three of four hypotheses. The fourth hypothesis is that changes in the demand for highly educated labor in Vietnam, perhaps due to recent changes in foreign direct investment inflows, rather than the labor supply, are perhaps the most important determinant of the returns to education across different levels.

Suggested Citation

  • Thi Hang Banh & Trang Hong Dao & Paul Glewwe & Giang Thai, 2024. "An investigation of the decline in the returns to higher education in Vietnam," Education Economics, Taylor & Francis Journals, vol. 32(5), pages 665-685, September.
    • Handle: RePEc:taf:edecon:v:32:y:2024:i:5:p:665-685
    DOI: 10.1080/09645292.2024.2362262
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    Citations

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    Cited by:

    1. Thi Hang,Banh & Coxhead,Ian & Vuong,Dinh Tuan Nguyen, 2026. "Local labor market effects of FDI: job growth and skills demand in Vietnam," IDE Discussion Papers 1005, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    2. Elisa Birch & Alison Preston, 2025. "The Falling Returns to Education in Australia," The Economic Record, The Economic Society of Australia, vol. 101(334), pages 377-391, September.
    3. Argan, Damiano & Gary-Bobo, Robert & Goussé, Marion, 2023. "Is there a devaluation of degrees ? Unobserved heterogeneity in returns to education and early experience," CEPREMAP Working Papers (Docweb) 2304, CEPREMAP.
    4. Vo Thanh Tam & Huynh Ngoc Chuong & Pham Khanh Nam, 2026. "Employment structures and human capital returns: propensity score matching evidence from Vietnam," Quality & Quantity: International Journal of Methodology, Springer, vol. 60(2), pages 6259-6286, April.
    5. Diep Phan & Ian Coxhead, 2025. "Capital market distortions and skills demand in a transitional economy: The case of Vietnam," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 33(3), pages 695-717, July.
    6. Choi, Seonkyung & Min, Insik & Ogawa, Keiichi, 2025. "Returns to education and decent work across firm ownership types in Vietnam," International Journal of Educational Development, Elsevier, vol. 119(C).
    7. Tomaliwan Maria Francesca & Sauler Mariel Monica, 2026. "The Role of Beyond-Secondary Levels of Education in Explaining Wage Differentials Across the Philippine Wage Distribution," Statistics, Politics and Policy, De Gruyter, vol. 17(1), pages 43-88.

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