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Decomposing wage inequality: Public and private sectors in Vietnam 1993-2006

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  • Clément Imbert

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper studies the labor market in Vietnam during the transition towards market economy (1993-2006): we show that the public-private sector wage gap markedly increased, but that wage inequality decreased overall. Our aim is to assess how much of this evolution can be explained by workers' productive skills and their allocation between sectors. We use a simple, yet innovative, method that allows us to take into account workers' unobservable characteristics and their remuneration in each sector. Throughout the period we consider, public sector workers are more skilled than private sector workers. However, rising returns to workers' skills in the public sector play a major role in the increase of the public-private sector gap. Against all expectations, the public sector grew richer as Vietnam moved towards market economy. Finally, a greater homogeneity among labor market participants seems to explain the overall decline in wage inequality.

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  • Clément Imbert, 2011. "Decomposing wage inequality: Public and private sectors in Vietnam 1993-2006," PSE Working Papers halshs-00564653, HAL.
    • Handle: RePEc:hal:psewpa:halshs-00564653
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00564653
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    Cited by:

    1. Huu Chi Nguyen & Christophe J. Nordman & Fran�ois Roubaud, 2013. "Who Suffers the Penalty?: A Panel Data Analysis of Earnings Gaps in Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 49(12), pages 1694-1710, December.
    2. Oostendorp, Remco H. & Doan, Quang Hong, 2013. "Have the returns to education really increased in Vietnam? Wage versus employment effect," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 923-938.
    3. Falco, Paolo & Haywood, Luke, 2016. "Entrepreneurship versus joblessness: Explaining the rise in self-employment," Journal of Development Economics, Elsevier, vol. 118(C), pages 245-265.
    4. Jean-Pierre Cling & Mireille Razafindrakoto & François Roubaud, 2014. "Segmentation and informality in Vietnam: A Survey of Literature," Working Papers DT/2014/14, DIAL (Développement, Institutions et Mondialisation).
    5. 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.

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    Keywords

    transition; inequality decomposition; public sector; décomposition l'inégalité; secteur public;
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