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Moving out of Agriculture: Structural Change in Vietnam

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  • Brian McCaig
  • Nina Pavcnik

Abstract

We examine the role of structural change in the economic development of Vietnam from 1990 to 2008. Structural change accounted for a third of the growth in aggregate labor productivity during this period, which averaged 5.1 percent per annum. We discuss the role of reforms in agriculture, enterprises, and international integration in this process. In addition to the drastic move of employment away from agriculture toward services and manufacturing, we also document the movement of workers away from household businesses toward firms in the enterprise sector, and the reallocation of workers from state owned firms toward private domestic and foreign owned firms. Manufacturing experienced particularly rapid growth in labor productivity and a large expansion of employment, as it grew from 8 to 14 percent of the workforce. Changes in trade policy, expansion of employment in foreign owned firms, and the declining role of state owned enterprises robustly contributed toward the changing structure of employment within manufacturing.

Suggested Citation

  • Brian McCaig & Nina Pavcnik, 2013. "Moving out of Agriculture: Structural Change in Vietnam," NBER Working Papers 19616, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19616
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    References listed on IDEAS

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    1. Ravallion, Martin & van de Walle, Dominique, 2008. "Does rising landlessness signal success or failure for Vietnam's agrarian transition?," Journal of Development Economics, Elsevier, vol. 87(2), pages 191-209, October.
    2. Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
    3. Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003. "The response of the informal sector to trade liberalization," Journal of Development Economics, Elsevier, vol. 72(2), pages 463-496, December.
    4. Rafael La Porta & Andrei Shleifer, 2008. "The Unofficial Economy and Economic Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 275-363.
    5. repec:hrv:faseco:33078210 is not listed on IDEAS
    6. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1403-1448.
    7. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    8. Margaret S. McMillan & Dani Rodrik, 2011. "Globalization, Structural Change and Productivity Growth," NBER Working Papers 17143, National Bureau of Economic Research, Inc.
    9. Diego Restuccia & Richard Rogerson, 2008. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 707-720, October.
    10. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    11. Paul Glewwe & Nisha Agrawal & David Dollar, 2004. "Economic Growth, Poverty, and Household Welfare in Vietnam," World Bank Publications, The World Bank, number 15010.
    12. Dwayne Benjamin & Loren Brandt & Barbara Coelli & Brian McCaig & Le-Hoa Nguyen & Tuan Nguyen, 2009. "Crop Output in Vietnam, 1992 to 2006," World Bank Other Operational Studies 28099, The World Bank.
    13. Mike Waugh & David Lagakos & Doug Gollin, 2011. "The Agricultural Productivity Gap in Developing Countries," 2011 Meeting Papers 1397, Society for Economic Dynamics.
    14. Rudolfs Bems & Robert C. Johnson, 2012. "Value-Added Exchange Rates," NBER Working Papers 18498, National Bureau of Economic Research, Inc.
    15. Prema-chandra Athukorala, 2006. "Trade Policy Reforms and the Structure of Protection in Vietnam," The World Economy, Wiley Blackwell, vol. 29(2), pages 161-187, February.
    16. Brian McCaig & Nina Pavcnik, 2014. "Export Markets and Labor Allocation in a Low-income Country," NBER Working Papers 20455, National Bureau of Economic Research, Inc.
    17. Brian, McCaig, 2011. "Exporting out of poverty: Provincial poverty in Vietnam and U.S. market access," Journal of International Economics, Elsevier, vol. 85(1), pages 102-113, September.
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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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