Export Liberalization, Job Creation and the Skill Premium : Evidence from the U.S.-Vietnam Bilateral Trade Agreement

This paper explores how the expansion of labor-intensive manufacturing exports resulting from the United States-Vietnam Bilateral Trade Agreement in 2001 translated into wages of skilled and unskilled workers and the skill premium in Vietnam through the channel of labor demand. In order to isolate the impacts of trade shock from the effects of other market-oriented reforms, a strategy of exploiting the regional variation in difference in exposure to trade is employed. Using the data on panel individuals from the Vietnam Household Living Standards Surveys of 2002 and 2004, and addressing the issue of endogeneity, the results confirm the existence of a Stolper-Samuelson type effect. That is, those provinces more exposed to the increase in exports experienced relatively larger wage growth for unskilled workers and a decline of (or a smaller increase in) the relative wages of skilled and unskilled workers. During the period 2000-2004, the skill premium increased for Vietnam's economy as a whole in the sample of panel individuals. Thus, the Stolper-Samuelson type effect appears to have mitigated but did not outweigh the impacts of other factors that contributed to the rise in the skill premium.

Bibliographic Details

Main Author:	Fukase, Emiko
Language:	English en_US
Published:	World Bank, Washington, DC 2013-04
Subjects:	ACCOUNTING, AGRICULTURAL TRADE, AGRICULTURAL TRADE LIBERALIZATION, AGRICULTURE, ANTIDUMPING, ANTIDUMPING DUTIES, APPAREL, AVERAGE WAGE, BILATERAL TRADE, CAPITAL FLOWS, CAPITAL GOODS, COBB-DOUGLAS PRODUCTION FUNCTION, COEFFICIENT ESTIMATE, COMPARATIVE ADVANTAGE, COUNTRY MARKETS, CREATING JOB, DEFLATORS, DEMAND SHOCKS, DEVELOPED COUNTRIES, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, DEVELOPMENT POLICY, DOMESTIC PRODUCTION, DOWNWARD BIAS, ECONOMIC GROWTH, ECONOMIC INTEGRATION, ECONOMIC POLICY, ECONOMIC SECTORS, ECONOMIC STRUCTURE, ECONOMIC THEORY, ECONOMICS RESEARCH, EDUCATIONAL ATTAINMENT, ELASTICITY, ELASTICITY OF LABOR SUPPLY, ELECTRONICS INDUSTRY, EMBARGO, EMPLOYMENT, EMPLOYMENT COMPOSITION, EMPLOYMENT EFFECT, EMPLOYMENT EFFECTS, EMPLOYMENT GENERATION, EMPLOYMENT GROWTH, EMPLOYMENT LEVEL, EMPLOYMENT SHARE, EXOGENOUS VARIABLES, EXPORT GROWTH, EXPORT INTENSITY, EXPORT MARKETS, EXPORT OPPORTUNITIES, EXPORT ORIENTATION, EXPORT PATTERNS, EXPORT PERFORMANCE, EXPORT PROCESSING, EXPORT PRODUCTS, EXPORT QUOTAS, EXPORT SECTOR, EXPORT SECTORS, EXPORT SUBSIDY, EXPORT-ORIENTED ACTIVITIES, EXPORTERS, EXPORTS, FINAL GOODS, FIRM LEVEL, FOREIGN DIRECT INVESTMENT, FOREIGN FIRMS, FORMAL SECTOR WORKERS, FREE TRADE, FREE TRADE AREA, FULL EMPLOYMENT, GDP, GENERAL AGREEMENT ON TARIFFS, GENERAL EQUILIBRIUM, GENERAL EQUILIBRIUM MODEL, GLOBALIZATION, GROSS DOMESTIC PRODUCT, GROSS OUTPUT, GROWTH RATE, HIGH WAGE, HOUSEHOLD ENTERPRISES, HOUSEHOLD INCOME, HOUSEHOLD SURVEYS, HUMAN CAPITAL, IMPACT OF TRADE, IMPACT OF TRADE LIBERALIZATION, IMPACT OF TRADE REFORMS, IMPORT PENETRATION, IMPORT PROTECTION, IMPORTS, INCOME INEQUALITY, INDUSTRIAL POLICY, INDUSTRIAL SECTOR, INDUSTRIALIZATION, INFORMAL SECTOR, INTERNATIONAL ECONOMICS, INTERNATIONAL MARKET, INTERNATIONAL MARKETS, INTERNATIONAL STANDARD, INTERNATIONAL TRADE, JOB CREATION, JOBS, LABOR COSTS, LABOR DEMAND, LABOR INTENSITY, LABOR MARKET, LABOR MARKET REFORMS, LABOR MARKETS, LABOR MOBILITY, LABOR MOVEMENTS, LABOR REALLOCATION, LABOR RELATIONS, LABOR SUPPLY, LABOR-INTENSIVE GROWTH, LABOUR, LIVING STANDARDS, MARKET ACCESS, MARKET ECONOMY, MARKET INTEGRATION, MULTIPLIER EFFECT, NON-TARIFF BARRIERS, NORMAL TRADE RELATIONS, OCCUPATION, OCCUPATIONS, OIL PRICES, OUTSOURCING, PREVIOUS STUDIES, PRIMARY EDUCATION, PRODUCT PRICES, PRODUCTION WORKERS, PRODUCTIVE FIRMS, PRODUCTIVITY, QUANTITATIVE RESTRICTIONS, REAL WAGE, REAL WAGES, REGIONALISM, SERVICE SECTOR, SKILL PREMIUM, SKILLED OCCUPATION, SPECIALIZATION, SUNK COSTS, SURPLUS LABOR, TARIFF ACT, TARIFF BARRIERS, TARIFF CHANGES, TARIFF RATE, TARIFF RATES, TARIFF REDUCTION, TARIFF REDUCTIONS, TARIFF SCHEDULE, TOTAL EMPLOYMENT, TOTAL LABOR FORCE, TOTAL WORKERS, TRADABLE GOODS, TRADE AGREEMENT, TRADE COSTS, TRADE DATA, TRADE LIBERALIZATION, TRADE OPENNESS, TRADE PATTERN, TRADE PATTERNS, TRADE POLICIES, TRADE POLICY, TRADE POLICY REFORMS, TRADE REFORM, TRADE REFORMS, TRADE REGIMES, TRADE SHOCKS, TRANSITION ECONOMIES, UNSKILLED LABOR, UNSKILLED WORKER, UNSKILLED WORKERS, URUGUAY ROUND, VALUE ADDED, VALUE OF OUTPUT, WAGE CHANGES, WAGE CONVERGENCE, WAGE DIFFERENTIALS, WAGE EMPLOYMENT, WAGE GAP, WAGE GROWTH, WAGE INEQUALITY, WAGE LEVELS, WAGE PREMIUM, WAGE SECTOR, WAGE STRUCTURE, WELFARE GAINS, WHITE-COLLAR OCCUPATIONS, WORKING HOURS, WORLD TRADE, WORLD TRADE ORGANIZATION, WTO,
Online Access:	http://documents.worldbank.org/curated/en/2013/04/17625179/export-liberalization-job-creation-skill-premium-evidence-us-vietnam-bilateral-trade-agreement https://hdl.handle.net/10986/15565
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