The informal sector wage gap among Vietnamese micro-firms

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Resumé

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.
OriginalsprogEngelsk
TidsskriftJournal of the Asia Pacific Economy
Vol/bind17
Udgave nummer4
Sider (fra-til)560-577
Antal sider19
ISSN1354-7860
DOI
StatusUdgivet - nov. 2012
Udgivet eksterntJa

Bibliografisk note

JEL classification: J31, O17, O53

Citer dette

@article{7769ff96c72e4df1a22c07c65bf42bd5,
title = "The informal sector wage gap among Vietnamese micro-firms",
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.",
author = "Torm, {Nina Elisabeth} and John Rand",
note = "JEL classification: J31, O17, O53",
year = "2012",
month = "11",
doi = "10.1080/13547860.2012.724544",
language = "English",
volume = "17",
pages = "560--577",
journal = "Journal of the Asia Pacific Economy",
issn = "1354-7860",
publisher = "Routledge",
number = "4",

}

The informal sector wage gap among Vietnamese micro-firms. / Torm, Nina Elisabeth; Rand, John.

I: Journal of the Asia Pacific Economy, Bind 17, Nr. 4, 11.2012, s. 560-577.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

TY - JOUR

T1 - The informal sector wage gap among Vietnamese micro-firms

AU - Torm, Nina Elisabeth

AU - Rand, John

N1 - JEL classification: J31, O17, O53

PY - 2012/11

Y1 - 2012/11

N2 - 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.

AB - 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.

U2 - 10.1080/13547860.2012.724544

DO - 10.1080/13547860.2012.724544

M3 - Journal article

VL - 17

SP - 560

EP - 577

JO - Journal of the Asia Pacific Economy

JF - Journal of the Asia Pacific Economy

SN - 1354-7860

IS - 4

ER -