The Labor Market Response To Economic Growth In Vietnam: Aggregate And Micro-Level Analyses Of Labor Market Indicators From 1993 To 2008

Economic growth generally has been associated with declining poverty and increasing living standards (Fields 2001). When this is true, economic growth has translated into increased well-being through higher labor earnings and improved work opportunities (World Development Report 1995 3). Therefore, in order to understand the impacts of economic growth on a country, it becomes crucial to understand how economic growth transforms the labor market. This thesis examines how labor market indicators in Vietnam changed in response to economic growth from 1993 to 2008. First, I examined how aggregate labor market indicators changed from 1993 to 2008. Specifically, are workers employed in better job categories than before and are workers earning more for their labor than before? Secondly, I asked from 2002-2008 when individuals are followed over time in panel data, which personal and labor market characteristics are associated with the largest labor income gains? Utilizing the VLSS and VHLSS data, I created both anonymous and panel statistics to answer my research questions. I obtained my results by analyzing trends, descriptive statistics, and OLS regression outputs. This allowed me to understand which workers experienced larger gains in labor income than did others. Looking at the aggregate, I found that from 1993 to 2008, overall, the labor market improved. All groups of workers enjoyed increasing wages and the composition of the labor market shifted towards high-paying employment categories. Therefore, workers were employed in better job categories and were earning more for their labor than previously. Additionally, in analyzing panel data to answer my second research question, I found from 2002 to 2008 that workers' employment categories and personal characteristics impacted earnings changes. The specific employment categories that most impacted earnings change varied between two-year panels. However, the majority of workers remained in wage employment, but they experienced large earnings increases while remaining in wage employment. Thus, workers responded to economic growth by changing employment status or remaining within an employment status. Those who were employed outside of household enterprises experienced on average the largest income gains. The same is true of workers initially in the lowest income quintile. Thus, firm type and initial income proved to be the most significant predictors of change in income