Impacts of Trade Liberalization on Employment in Vietnam: A System Generalized Method of Moments Estimation

Abstract

Using a system generalized method of moments model, the present paper investigates the impacts of trade liberalization on employment in Vietnam from 1999 to 2004. The results show that the increase in industrial output increased labor demand, whereas the increasing wage rate led to a decline in the employment level. The impact of export expansion on derived labor demand was positive and statistically significant, indicating that the higher level of exports than previously presented employment opportunities for the country's large labor surplus. As far as imports are concerned, empirical observations indicate that imports did not necessarily negatively impact Vietnam's employment level.

International Trade and Employment: A Quantile Regression Approach

“…These findings, however, are inconsistent with the empirical evidence presented by Kien and Heo (2009), who suggest that import penetration has a positive and insignificant effect on employment. One reason for this different finding by Kien and Heo (2009) could be that their study is based on industry-level data, which are more likely to be biased, being aggregated data (Kasahara and Rodrigue 2008).…”

“…One reason for this different finding by Kien and Heo (2009) could be that their study is based on industry-level data, which are more likely to be biased, being aggregated data (Kasahara and Rodrigue 2008). Meanwhile, our study is based on firm-level data that capture firm heterogeneity.…”

“…A common belief in Vietnam is that while an increase in exports has a positive impact on labor demand, the link between imports and employment growth is weak (Kien and Heo 2009). However, we argue that studies that use industry-level data or country-level data have shortcomings.…”

Export Liberalization, Job Creation, and the Skill Premium: Evidence from the US–Vietnam Bilateral Trade Agreement (BTA)

“…WORLD DEVELOPMENT tent analysis which in turn was used to estimate the employment effects of trade in Vietnam (see, for instance, Belser, 2000;Jenkins, 2004;Kien & Heo, 2009). The employment coefficients, i.e., the number of workers needed to produce one billion dong worth of goods, 11 were calculated using the employment and production data from the annual Enterprise Survey data and exports data from the UN Comtrade System at the two-digit VSIC level for the period 2000-2007.…”

What Determines Export Participation of Private Domestic Manufacturing SMEs in Vietnam?

“…In addition, export participation helps firms improve their productivity, and increase revenue (Hiep & Ohta, 2009). Some studies also indicate that export participation and growth help create and expand employment (e.g., Jenkins, 2004;Kien & Heo, 2009). …”