Decomposing the Labor Market Earnings Inequality: The Public and Private Sectors in Vietnam, 1993-2006

In contrast with the typical transition to a market economy, earnings inequality in Vietnam between 1993 and 2006 appears to have decreased, and the earnings gap in favor of public employees appears to have widened. The paper uses a comparative advantage model to disentangle the effect of sorting workers across sectors from the effect of the differences in returns to workers' skills. The selection of the best workers into the public sector is clearly an important component of the explanation for the public-private sector earnings gap, but the widening of this gap over time is primarily due to changes in the compensation patterns. The paper finds that, in the 1990s, public employees were underpaid compared with their earning potential in the private sector whereas, in the early 2000s, public employees earned similar returns to their comparative advantage in the public and private sectors. The increasing homogeneity in returns to skills in the Vietnamese labor market appears to explain both the increase in the public-private pay gap and the decrease in overall inequality.

Bibliographic Details

Main Author:	Imbert, Clément
Format:	Policy Research Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2013-01
Subjects:	ATTRITION, CAPACITY BUILDING, COMPARATIVE ADVANTAGE, CONSTANT RETURNS, DATA MODEL, DESCRIPTIVE STATISTICS, DEVELOPMENT ECONOMICS, DOMESTIC FIRMS, EARNING, EARNING INEQUALITY, EARNINGS INEQUALITY, ECONOMETRIC MODELS, ECONOMIC DEVELOPMENT, ECONOMIC REVIEW, ELECTRICITY, EMPLOYEE, EMPLOYMENT HISTORIES, EMPLOYMENT HISTORY, FINANCIAL CRISIS, HOUSEHOLD SURVEYS, INCREASING FUNCTION, INEQUALITY-INCREASING EFFECT, LABOR ECONOMICS, LABOR MARKET, LABOR MARKET REFORMS, LABOR MARKET SEGMENTATION, LABOR MARKETS, MASSIVE LAYOFFS, MEASUREMENT ERROR, OCCUPATION, OCCUPATIONS, OLDER WORKERS, POLICY DISCUSSIONS, POLICY RESEARCH, POLITICAL ECONOMY, POOR COUNTRY, PREVIOUS SECTION, PRIVATE COMPANIES, PRIVATE EMPLOYMENT, PRIVATE ENTERPRISES, PRIVATE FIRMS, PRIVATE SECTOR, PRIVATE SECTOR EARNINGS, PRIVATE SECTOR EMPLOYEES, PRIVATE SECTOR JOBS, PRIVATE SECTOR WORKER, PRIVATE SECTOR WORKERS, PRIVATE SECTORS, PUBLIC, PUBLIC EMPLOYEES, PUBLIC EMPLOYMENT, PUBLIC ENTERPRISES, PUBLIC SECTOR, PUBLIC SECTOR EMPLOYEES, PUBLIC SECTOR PAY, PUBLIC SECTOR REFORM, PUBLIC SECTOR WAGE, PUBLIC SECTOR WORKER, PUBLIC SECTOR WORKERS, PUBLIC SECTOR WORKFORCE, PUBLIC WAGE, PUBLIC WORKERS, QUANTILE REGRESSIONS, RELATIVE IMPORTANCE, RURAL WORKERS, SERIAL CORRELATION, SIGNIFICANT DIFFERENCES, SIGNIFICANT EFFECT, SOCIAL CAPITAL, STATE EMPLOYEES, TOTAL EMPLOYMENT, TOTAL LABOR FORCE, UNSKILLED WORKERS, URBAN AREAS, VOCATIONAL TRAINING, WAGE DIFFERENTIAL, WAGE DIFFERENTIALS, WAGE DISTRIBUTION, WAGE EMPLOYMENT, WAGE GAP, WAGE INEQUALITY, WAGE PREMIUM, WORKER, WORKERS, YOUNGER WORKERS,
Online Access:	http://documents.worldbank.org/curated/en/2013/01/17205551/decomposing-labor-market-earnings-inequality-public-private-sectors-vietnam-1993-2006 http://hdl.handle.net/10986/13130
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