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

47 Pages Posted: 26 Jan 2013

See all articles by Huu Nguyen

Huu Nguyen

affiliation not provided to SSRN

Christophe J. Nordman

Institut de Recherche pour le Developpement (IRD); IRD, DIAL, Paris

François Roubaud

Développement Institutions & Analyses de Long terme (DIAL) - Institut de Recherche pour le Développement (IRD)

Abstract

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 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 the Vietnam's labour market specificity.

Keywords: informal employment, earnings gap, transition matrix, panel data, Vietnam

JEL Classification: J21, J23, J24, J31, O17

Suggested Citation

Nguyen, Huu and Nordman, Christophe Jalil and Nordman, Christophe Jalil and Roubaud, François, Who Suffers the Penalty? A Panel Data Analysis of Earnings Gaps in Vietnam. IZA Discussion Paper No. 7149, Available at SSRN: https://ssrn.com/abstract=2207290 or http://dx.doi.org/10.2139/ssrn.2207290

Huu Nguyen (Contact Author)

affiliation not provided to SSRN

No Address Available

Christophe Jalil Nordman

Institut de Recherche pour le Developpement (IRD)

213, rue La Fayette
75480 Paris cedex 10, 90009
France

IRD, DIAL, Paris

213, rue La Fayette
75480 Paris cedex 10, 90009
France

François Roubaud

Développement Institutions & Analyses de Long terme (DIAL) - Institut de Recherche pour le Développement (IRD) ( email )

4 rue d'Enghien
Paris 75010, 90009
France
+33 (0)1 53 24 14 76 (Phone)
+ 33 (0)1 53 24 14 50 (Fax)

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