The Impact of Trade Liberalization on the Return to Education in Vietnam: Wage Versus Employment Effect

Tinbergen Institute Discussion Paper 11-060/3

53 Pages Posted: 6 Apr 2011

See all articles by Remco Oostendorp

Remco Oostendorp

Vrije Universiteit; Tinbergen Institute; University of Oxford - Centre for the Study of African Economies (CSAE)

Doan Hong Quang

affiliation not provided to SSRN

Date Written: September 30, 2010

Abstract

Several studies have identified the impact of trade liberalization in developing countries on the return to education within a Mincerian framework through a difference-in-difference estimator or with industry-level measures of trade openness. These studies have typically estimated the return to education in terms of changes in wages rather than employment, effectively ignoring the fact that trade liberalization affects not only wages but also employment opportunities. In this paper we use four large-scale representative household surveys from Vietnam for the period 1998-2006 to estimate the impact of trade liberalization on the return to education taking into account both changes in wages and employment. The results show that the impact was large in Vietnam but is severely underestimated if changes in employment opportunities are ignored.

Keywords: trade liberalization, return to education, employment, Vietnam

JEL Classification: F16, J21, J31, O1

Suggested Citation

Oostendorp, Remco and Quang, Doan Hong, The Impact of Trade Liberalization on the Return to Education in Vietnam: Wage Versus Employment Effect (September 30, 2010). Tinbergen Institute Discussion Paper 11-060/3, Available at SSRN: https://ssrn.com/abstract=1799945 or http://dx.doi.org/10.2139/ssrn.1799945

Remco Oostendorp (Contact Author)

Vrije Universiteit ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

University of Oxford - Centre for the Study of African Economies (CSAE) ( email )

Oxford OX1 3UL
United Kingdom

Doan Hong Quang

affiliation not provided to SSRN ( email )

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