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Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam

Roubaud, François; Nordman, Christophe Jalil; Nguyen, Huu Chi (2013), Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam, The Journal of Development Studies, 49, 12, p. 1694-1710. 10.1080/00220388.2013.822069

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Type
Article accepté pour publication ou publié
Date
2013-12
Journal name
The Journal of Development Studies
Volume
49
Number
12
Publisher
Taylor & Francis
Pages
1694-1710
Publication identifier
10.1080/00220388.2013.822069
Metadata
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Author(s)
Roubaud, François

Nordman, Christophe Jalil cc

Nguyen, Huu Chi
Abstract (EN)
In spite of its predominant economic weight in developing countries, little is known about the informal sector earnings structure compared to that of the formal sector. Taking advantage of the rich VHLSS dataset in Vietnam, in particular its three wave panel data (2002, 2004, 2006), we assess the magnitude of various formal–informal earnings gaps while addressing heterogeneity at three different levels: the worker, the job (wage employment vs. self-employment) and the earnings distribution. We estimate fixed effects and quantile regressions to control for unobserved individual characteristics. Our results suggest that the informal sector earnings gap highly depends on the workers’ job status and on their relative position in the earnings distribution. Penalties may in some cases turn into premiums. By comparing our results with studies in other developing countries, we draw conclusions highlighting Vietnam’s labour market specificity
Subjects / Keywords
Informal employment; earnings gap; transition matrix; panel data; Vietnam
JEL
J21 - Labor Force and Employment, Size, and Structure
J23 - Labor Demand
J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Wage Level and Structure; Wage Differentials
O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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