Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/taf/rjapxx/v17y2012i4p560-577.html
   My bibliography  Save this article

The informal sector wage gap among Vietnamese micro-firms

Author

Listed:
  • John Rand
  • Nina Torm
Abstract
Based on unique firm survey data from 2009, this paper examines the wage differential between formal and informal manufacturing household enterprises in Vietnam. Using the Blinder–Oaxaca decomposition method, we investigate whether the wage gap is attributed mostly to differences in observable characteristics (the endowments) between formal and informal firms, or to variations in the returns to these characteristics (the unexplained component). The results show that average wages are 10%–20% higher in formal firms and that the majority of this gap is due to observable characteristics, in particular differences in firm size, workforce characteristics and location. Thus, traditional wage determinants seem to play an important role in explaining the higher wage returns in formal firms.

Suggested Citation

  • John Rand & Nina Torm, 2012. "The informal sector wage gap among Vietnamese micro-firms," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 17(4), pages 560-577.
    • Handle: RePEc:taf:rjapxx:v:17:y:2012:i:4:p:560-577
    DOI: 10.1080/13547860.2012.724544
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13547860.2012.724544
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13547860.2012.724544?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Olivier Bargain & Prudence Kwenda, 2014. "The Informal Sector Wage Gap: New Evidence Using Quantile Estimations on Panel Data," Economic Development and Cultural Change, University of Chicago Press, vol. 63(1), pages 117-153.
    2. Olivier Bargain & Prudence Kwenda, 2009. "The Informal Sector Wage Gap: New Evidence Using Quantile Regressions on Panel Data," CEDI Discussion Paper Series 09-06, Centre for Economic Development and Institutions(CEDI), Brunel University.
    3. Kim, Annette Miae, 2008. "Learning to be Capitalists: Entrepreneurs in Vietnam's Transition Economy," OUP Catalogue, Oxford University Press, number 9780195369397.
    4. Nguyen Huu Chi & Nguyen Thi Thu Huyen & Axel Demenet & Mireille Razafindrakoto & Francois Roubaud, 2010. "Dynamics of the Informal Sector in Hanoi and Ho Chi Minh City 2007-2009," World Bank Publications - Reports 27581, The World Bank Group.
    5. Alan Gelb & Taye Mengistae & Vijaya Ramachandran & Manju Kedia Shah, 2009. "To Formalize or Not to Formalize? Comparisons of Microenterprise Data from Southern and East Africa," Working Papers 175, Center for Global Development.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marc Auboin & Alisa DiCaprio, 2017. "Why Do Trade Finance Gaps Persist: Does it Matter for Trade and Development?," CESifo Working Paper Series 6425, CESifo.
    2. Christine ABLAZA & Mark WESTERN & Wojtek TOMASZEWSKI, 2021. "Good jobs and bad jobs for Indonesia's informal workers," International Labour Review, International Labour Organization, vol. 160(1), pages 143-168, March.
    3. M. Ali Choudhary & Saima Mahmood & Gylfi Zoega, 2015. "Informal Labour Markets in Pakistan," BCAM Working Papers 1504, Birkbeck Centre for Applied Macroeconomics.
    4. Mr. Christopher S Adam & Mr. Edward F Buffie, 2020. "The Minimum Wage Puzzle in Less Developed Countries: Reconciling Theory and Evidence," IMF Working Papers 2020/023, International Monetary Fund.
    5. Auboin, Marc & DiCaprio, Alisa, 2016. "Why do trade finance gaps persist: Does it matter for trade and development?," WTO Staff Working Papers ERSD-2017-01, World Trade Organization (WTO), Economic Research and Statistics Division.
    6. Vo, Thang T. & Ha, Truong Thiet, 2021. "Decomposition of gender bias in enterprise employment: Insights from Vietnam," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 182-194.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brandon Vick, 2017. "Measuring links between labor monopsony and the gender pay gap in Brazil," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-28, December.
    2. Maria Manuel Campos & Mário Centeno, 2011. "Public-private wage gaps in the period prior to the adoption of the euro: an application based on longitudinal data," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    3. M. Ali Choudhary & Saima Mahmood & Gylfi Zoega, 2015. "Informal Labour Markets in Pakistan," BCAM Working Papers 1504, Birkbeck Centre for Applied Macroeconomics.
    4. repec:zbw:rwirep:0263 is not listed on IDEAS
    5. Nadine Levratto & Aziza Garsaa & Luc Tessier, 2013. "To what extent do exemptions from social security contributions affect firm growth? New evidence using quantile estimations on panel data," Working Papers hal-00833049, HAL.
    6. Aysit Tansel & Elif Oznur Acar, 2016. "The Formal/Informal Employment Earnings Gap: Evidence from Turkey," Research on Economic Inequality, in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 121-154, Emerald Group Publishing Limited.
    7. D. Boccanfuso & L. Savard, 2012. "A Segmented Labour Supply Model Estimation for the Construction of a CGE Microsimulation Model: An Application to the Philippines," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 6(2), pages 211-234, May.
    8. Nadine Levratto & Aziza Garsaa & Luc Tessier, 2013. "La Corse est-elle soluble dans le modèle méditerranéen ? Une analyse à partir d’une régression quantile sur données d’entreprises en panel entre 2004 et 2010. Is the Corsican economy a part of the Med," EconomiX Working Papers 2013-20, University of Paris Nanterre, EconomiX.
    9. Dasgupta, Sukti. & Bhula-or, Ruttiya. & Fakthong, Tiraphap., 2015. "Earnings differentials between formal and informal employment in Thailand," ILO Working Papers 994896403402676, International Labour Organization.
    10. Subhasankar Chattopadhyay & Rima Mondal, 2017. "Characterisation of Economic Growth in Developing Economies with Informal Sector," Economic Papers, The Economic Society of Australia, vol. 36(1), pages 86-101, March.
    11. John P. Haisken-DeNew & Maren M. Michaelsen, 2011. "Migration Magnet: The Role of Work Experience in Rural-Urban Wage Diff erentials in Mexico," Ruhr Economic Papers 0263, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    12. Maren Michaelsen & John Haisken-DeNew, 2015. "Migration magnet: the role of work experience in rural–urban wage differentials," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-25, December.
    13. Nadine Levratto & Aziza Garsaa & Luc Tessier, 2013. "La Corse est-elle soluble dans le modèle méditerranéen ?," Working Papers hal-00842059, HAL.
    14. Ahmed Nawaz Hakro & Yaseen Ghulam & Shabbar Jaffry & Vyoma Shah, 2021. "Employment Choices and Wage Differentials: Evidence on Labor Force Data Sets from Pakistan," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(1), pages 199-216, March.
    15. Aysit Tansel & Elif Oznur Acar, 2016. "The Formal/Informal Employment Earnings Gap: Evidence from Turkey," Research on Economic Inequality,in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 121-154 Emerald Publishing Ltd.
    16. Petr Huber & Ulugbek Rahimov, 2014. "Formal and Informal Sector Wage Differences in Transition Economies: Evidence from Tajikistan," MENDELU Working Papers in Business and Economics 2014-48, Mendel University in Brno, Faculty of Business and Economics.
    17. Michaelsen, Maren M. & Haisken-DeNew, John P., 2011. "Migration Magnet: The Role of Work Experience in Rural-Urban Wage Differentials in Mexico," Ruhr Economic Papers 263, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    18. repec:aia:aiaswp:140 is not listed on IDEAS
    19. Hanan Nazier & Racha Ramadan, 2015. "Informality and Poverty: A Causality Dilemma with Application to Egypt," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 5(4), pages 1-4.
    20. Aziza GARSAA & Nadine LEVRATTO & Luc TESSIER, 2015. "Do Exemptions From Social Security Contributions Affect Job Creation? New Empirical Evidence From French Overseas Regions," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 42, pages 79-104.
    21. Arbex, Marcelo & Galvao, Antonio F. & Gomes, Fábio Augusto Reis, 2010. "Heterogeneity in the Returns to Education and Informal Activities," Insper Working Papers wpe_216, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    22. Bharatha Prabath Parakrama Badullahewage & Shohani Upeksha Badullahewage, 2021. "Wage Difference Between Formal Sector and Informal Sector Jobs; With Special Reference to the Labour Market in Sri Lanka," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 7(3), pages 7-17, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rjapxx:v:17:y:2012:i:4:p:560-577. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rjap .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.