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Did a Successful Fight against COVID-19 Come at a Cost? Impacts of the Pandemic on Employment Outcomes in Vietnam

Author

Listed:
  • Hai-Anh Dang

    (World Bank)

  • Cuong Nguyen

    (Vietnam National University)

  • Calogero Carletto

    (World Bank)

Abstract

Little evidence exists on the adverse effects of COVID-19 on the labor market for poorer countries. Despite its low middle-income status, Vietnam has been widely praised for its success in the fight against early waves of the COVID-19 pandemic, with a low mortality rate of around 100 deaths out of a population of less than 100 million by the end of 2020. We rigorously estimate the pandemic effects on employment outcomes in Vietnam, applying difference-in-differences and regression discontinuity design models to rich individual-level data from the Labor Force Surveys spanning 2015 to 2020. We find post-pandemic increased unemployment and temporary layoff rates and decreased employment quality. Monthly wages reduced but the proportion of workers receiving below-minimum wages substantially increased, contributing to sharply rising wage inequality. Our findings suggest that more resources can be allocated to protect vulnerable workers, especially as the pandemic prolongs and likely results in more severe damages to the economy.

Suggested Citation

  • Hai-Anh Dang & Cuong Nguyen & Calogero Carletto, 2022. "Did a Successful Fight against COVID-19 Come at a Cost? Impacts of the Pandemic on Employment Outcomes in Vietnam," Working Papers 607, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2022-607
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2022-607.pdf
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    Cited by:

    1. Gong, Da & Shang, Zhuocheng & Su, Yaqin & Yan, Andong & Zhang, Qi, 2024. "Economic impacts of China's zero-COVID policies," China Economic Review, Elsevier, vol. 83(C).
    2. Verena Preusse & Manuel Santos Silva & Linda Steinhübel & Meike Wollni, 2024. "Covid‐19 and agricultural labor supply: Evidence from the rural–urban interface of an Indian mega‐city," Agribusiness, John Wiley & Sons, Ltd., vol. 40(2), pages 391-415, April.
    3. Da Gong & Andong Yan & Jialin Yu, 2024. "The Costs of Zero-Covid: Effects of Anti-contagious Policy on Labor Market Outcomes in China," Journal of Labor Research, Springer, vol. 45(3), pages 436-478, September.
    4. Kugler, Maurice & Viollaz, Mariana & Duque, Daniel & Gaddis, Isis & Newhouse, David & Palacios-Lopez, Amparo & Weber, Michael, 2023. "How did the COVID-19 crisis affect different types of workers in the developing world?," World Development, Elsevier, vol. 170(C).
    5. Chakravorty, Bhaskar & Bhatiya, Apurav Yash & Imbert, Clément & Lohnert, Maximilian & Panda, Poonam & Rathelot, Roland, 2023. "Impact of the COVID-19 crisis on India’s rural youth: Evidence from a panel survey and an experiment," World Development, Elsevier, vol. 168(C).
    6. Nguyen, Cuong Viet & Tarp, Finn, 2023. "Cash Transfers and Labor Supply: New Evidence on Impacts and Mechanisms," GLO Discussion Paper Series 1243, Global Labor Organization (GLO).
    7. Ahmed Samour & Abdullah AlGhazali & Mihaela Gadoiu & Mariana Banuta, 2024. "Capital structure and financial performance of China’s energy industry: What can we infer from COVID-19?," PLOS ONE, Public Library of Science, vol. 19(6), pages 1-14, June.
    8. Brunckhorst, Ben & Cojocaru, Alexandru & Kim, Yeon Soo & Kugler, Maurice, 2024. "Long COVID: The evolution of household welfare in developing countries during the pandemic," World Development, Elsevier, vol. 175(C).

    More about this item

    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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