Product Market Integration and Household Labor Supply in a Poor Economy: Evidence from Vietnam

Abstract

Edmonds and Pavcnik consider how product market integration in a country's primary agricultural export alters the economic activities of men and women in a poor economy. Between 1993 and 1997, Vietnam relaxed its rice export quota and freed internal restrictions on the trade of rice across regions. These reforms contributed to an almost 30 percent increase in the real price of rice. Using a panel of rural Vietnamese communities that spans the period of policy change, the authors relate the regional and intertemporal variation in the price of rice to changes in the economic activities of children, young adults, and adults by gender. They find that higher rice prices are associated with lower participation in wage work by boys, girls, and young adults, and lower participation in household production by adults. Moreover, higher rice prices are associated with less time devoted to household production for all age groups and adults devoting more hours to wage work. Finally, with the exception of children, labor market responses to changes in rice prices mostly do not differ statistically for males and females.

This paper is a product of the Gender Division, Poverty Reduction and Economic Management Network.

Keywords: Market Integration, Trade Liberalization, Labor Supply, Gender

JEL Classification: F15, F14