The Impact of Family Circumstances on Work and Education: Evidence from Vietnam

This thesis analyses the connection between family circumstances and work and educational outcomes of individuals in the family. It consists of a theoretical chapter developing a conceptual framework analysing various factors affecting female labour force participation and two empirical chapters analysing the relationships between family well-being and education and labour market outcomes. The first chapter develops a broad conceptual framework encompassing both supply and demand aspects to explain women’s participation in the labour force. The supply side factors include fertility, partner’s income, potential childcare assistance from extended family members, the youngest child’s age and the female’s age and education. The demand side factors include the gender wage differential and the unemployment rate. From these different factors, this chapter derives a model of female labour supply which assumes that the female’s utility is a function of her family’s disposable income. This conceptual framework could lead to hypotheses on the participation of women in the labour market. The second chapter is an empirical analysis testing one of the derived hypotheses from the conceptual framework on the determinants of female labour supply. This chapter focuses on analysing empirically the impact of fertility on female labour force participation in the less researched context of developing countries. Particularly, this thesis focuses on the effect of having an additional child on a female’s probability of labour force participation. This study is based on a sample of women aged 18-35 with at least two children from the Vietnam Population and Housing Census Survey 2009. This study uses an instrumental variable methodology based on the widely observed phenomenon of parental son preference in Vietnamese society to address the endogeneity problem of fertility. Results suggest that the presence of an additional child among families with two or more children is likely to reduce the labour force participation probability of mothers and the effect of these children on female labour supply varies with the mother’s and father’s educational attainments. The third chapter investigates the relationship between parental health shocks and children’s engagement in education and the labour market, using panel data from the Vietnam Household Living Standards Surveys between 2004 and 2008. While there is substantial evidence showing the intergenerational transmission of health, the literature investigating the impact of parental health on children’s educational and labour market outcomes is limited, especially in developing countries. In this chapter, child fixed effects and control for a detailed set of household and local area characteristics are used. This study’s main findings show that maternal illness substantially decreases the chances of being enrolled in school for children between 10 and 23 years old and, at the same time, increases children’s likelihood of entering the labour market and working more hours for children aged 15-18 years old. The effect is particularly pronounced for girls who seem to experience the worst adverse consequences in terms of education and labour market engagement