Foreign Wage Premium, Gender and Education : Insights from Vietnam Household Surveys
This paper investigates the differential impacts of foreign ownership on wages for different types of workers (in terms of educational background and gender) in Vietnam using the Vietnam Household Living Standards Surveys of 2002 and 2004. Whereas most previous studies have compared wage levels between foreign and domestic sectors using firm-level data (thus excluding the informal sector), one advantage of using the Living Standards Surveys in this paper is that the data allow wage comparison analyses to extend to the informal wage sector. A series of Mincerian earnings equations and worker-specific fixed effects models are estimated. Several findings emerge. First, foreign firms pay higher wages relative to their domestic counterparts after controlling for workers personal characteristics. Second, the higher the individual workers' levels of education, the larger on average are the wage premiums for those who work for foreign firms. Third, longer hours of work in foreign firm jobs relative to working in the informal wage sector are an important component of the wage premium. Finally, unskilled women experience a larger foreign wage premium than unskilled men, reflecting the low earning opportunities for women and a higher gender gap in the informal wage sector.
| Summary: | This paper investigates the differential
impacts of foreign ownership on wages for different types of
workers (in terms of educational background and gender) in
Vietnam using the Vietnam Household Living Standards Surveys
of 2002 and 2004. Whereas most previous studies have
compared wage levels between foreign and domestic sectors
using firm-level data (thus excluding the informal sector),
one advantage of using the Living Standards Surveys in this
paper is that the data allow wage comparison analyses to
extend to the informal wage sector. A series of Mincerian
earnings equations and worker-specific fixed effects models
are estimated. Several findings emerge. First, foreign firms
pay higher wages relative to their domestic counterparts
after controlling for workers personal characteristics.
Second, the higher the individual workers' levels of
education, the larger on average are the wage premiums for
those who work for foreign firms. Third, longer hours of
work in foreign firm jobs relative to working in the
informal wage sector are an important component of the wage
premium. Finally, unskilled women experience a larger
foreign wage premium than unskilled men, reflecting the low
earning opportunities for women and a higher gender gap in
the informal wage sector. |
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