Nguyen Viet, Cuong (2010): The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam.
Download (305kB) | Preview
This study provides empirical evidence on the impact of a minimum wage increase on employment, wages, and expenditures of workers in the formal sector who have wages below the minimum level in Vietnam. Using the difference-in-differences with propensity score matching and Vietnam Household Living Standard Surveys 2004 and 2006, the paper finds that the minimum wage increase reduced employment of low-wage workers in the formal sector. However, workers who lost formal sector jobs were able to find jobs in the informal sector. The effect of the minimum wage increase on wages and expenditures of workers is not statistically significant.
|Item Type:||MPRA Paper|
|Original Title:||The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam|
|Keywords:||Minimum wage, employment, income, Vietnam, difference-in-differences, propensity score matching|
|Subjects:||D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand
|Depositing User:||Cuong Nguyen Viet|
|Date Deposited:||18. Feb 2012 14:01|
|Last Modified:||12. Feb 2013 20:36|
Abadie, A. and Guido. W. Imbens (2006). ‘On the failure of the bootstrap for matching estimators’, NBER Technical Working Paper No. 325, Cambridge, MA: National Bureau of Economic Research.
Abowd, J. M., Francis K., and David N. M. (1999). ‘Minimum wages and employment in France and the United States’. NBER Technical Working Paper No. 6996, Cambridge, MA: National Bureau of Economic Research.
Bao Moi. 2009. ‘Tăng lương tối thiểu nên mừng hay lo?’, Báo Mới (New Newspaper), dated on 8/4/2009. Available at http://www.baomoi.com/Tang-luong-toi-thieu-nen-mung-hay-lo/47/2615949.epi
Bazen, S. (2000). ‘The impact of the regulation of low wages on inequality and labour market adjustment: a comparative analysis’, Oxford Review of Economic Policy, 16(1), pp. 57-69.
Bell, L. (1997). ‘The impact of minimum wages in Mexico and Colombia’, Journal of Labor Economics, 15(3), pp. 102-135.
Brown, C., Gilroy C., and Kohen A. (1982). ‘The effect of the minimum wage on employment and unemployment’, Journal of Economic Literature, 20, pp. 487-528
Brown, C. (1999). ‘Minimum wages, employment and the distribution of income’, In Handbook of Labor Economics, Vol. 3. Edited by O. Ashenfelter and D. Card. Elsevier Science, 1999, pp. 2101-2163.
Burkhauser, R. V., Couch K. A. and Wittenburg D. C. (2000). ‘A reassessment of the new economics of the minimum wage literature with monthly data from the current population survey’, Journal of Labor Economics, 18(4), pp. 653-680.
Campolieti, M., Fang T. and Gunderson M. (2005). ‘Minimum wage impacts on youth employment transitions, 1993-1999’, Canadian Journal of Economics, 18(1), pp. 81-104.
Card, D. and Krueger A. (1994). ‘Minimum wages and employment: a case study of the fast- food industry in New Jersey and Pennsylvania’, American Economic Review, 84(5), pp. 772-93.
Card, D. and Krueger A. (1995). Myth and Measurement: The New Economics of the Minimum Wage. Princeton: Princeton University Press, 1995.
Card, D. and Krueger A. (2000). ‘Minimum wages and employment: a case study of the fast-food industry in New Jersey and Pennsylvania: Reply.’ American Economic Review, 90(5), pp. 1397-1420.
Card, D. (1992). ‘Do minimum wages reduce employment? a case study of California, 1987- 1989’, Industrial and Labor Relations Review, 46(1), pp. 38-54.
Cochran, W. G. (1968). ‘The effectiveness of adjustment by subclassification in removing bias in observational studies’, Biometrics, 24, pp. 295-313.
Cochran, W. G. and Chambers S. P. (1965). ‘The planning of observational studies of human population’, Journal of the Royal Statistical Society, 128(2), pp. 234-266.
Dan Tri. 2009a. ‘Tăng lương sẽ không tác động nhiều đến tăng giá’, Báo Dân Trí (People Intellectual Newspapers), dated 8/4/2009
Dan Tri. 2009b. ‘Mừng ít, lo nhiều chuyện tăng lương’, Báo Dân Trí (People Intellectual Newspapers), dated on 8/4/2009.
Deaton, A. (1997). The Analysis of Household Surveys. The Johns Hopkins University Press, Baltimore, Maryland, U.S.A.
Dehejia, R. and S. Wahba. (1998). ‘Propensity score matching methods for non-experimental causal studies’, NBER Technical Working Paper No. 6829, Cambridge, MA: National Bureau of Economic Research.
Dickens, R., Machin S., Manning A., Metcalf D., Wadsworth, and Woodland S. (1995). ‘The effect of minimum wages on UK agriculture’, Journal of Agricultural Economics 46(1), pp. 1–19.
Dickens, R., Machin S., and Manning A. (1999). ‘The effects of minimum wages on employment: theory and evidence from Britain’, Journal of Labor Economics, 17(1), pp. 1–22.
Dowrick, S. and Quiggin J. (2003). ‘A survey of the literature on minimum wage’, Unpublished Manuscript, Australian National University.
Duy-Tuan (2009). ‘Bộ trưởng LĐTB&XH: Nghe thì cứ tưởng là tăng lương...’, VTC News, dated on 8/4/2009.
Gindling, T. and Terrell K. (2004). ‘The effects of multiple minimum wages throughout the labor market’, Discussion Paper No. 1159, Institute for the Study of Labor, Germany.
Government of Vietnam. (2006). ‘Government decree on minimum wage’, No. 94/2006/NĐ-CP, dated on September 7, 2006.
Government of Vietnam. (2008). ‘Government decree on regional minimum wage for labor in enterprises, collective, farm, households and other organizations in Vietnam, No. 110/2008/ND-CP dated on October 10, 2008’.
Government of Vietnam. (2009). ‘Government decree on minimum wage’, No. 33/2009/NĐ-CP, dated on April 6, 2009.
Gunderson, M. (2005). ‘Minimum wages in Canada: theory, evidence and policy’, the Federal Labour Standards Review Commission, Minimum Wage No. 512.
Hahn, J., Todd P. and van der Klaauw W. (2001). ‘Identification and estimation of treatment effects with a regression-discontinuity design.’ Econometrica, 69(1), pp. 201-09.
Harrison, A. and Scorse J. (2005). ‘Moving up or moving out? anti-sweatshop activists and labor market outcomes.’ NBER Technical Working Paper No. 10492, Cambridge, MA: National Bureau of Economic Research.
Heckman, J., Ichimura H., and Todd P. (1997). ‘Matching as an econometric evaluation estimators: evidence from evaluating a job training programme’, Review of Economic Studies, 64(4), pp. 605- 654.
Heckman, J., Lalonde R., and Smith J. (1999). ‘The economics and econometrics of active labor market programs’, Handbook of Labor Economics, Volume 3, Ashenfelter, A. and D. Card, eds., Amsterdam: Elsevier Science.
Katz, L. F., and Krueger A. B. (1992). ‘The effect of the minimum wage on the fast food industry’, Industrial and Labor Relations Review, 46(1), pp. 6-21.
Lemos, S. (2004). ‘Minimum wage policy and employment effects: evidence from Brazil’, Economia, 5(1), pp. 219-66.
Mangan, J., and Johnston J. (1999). ‘Minimum wages, training wages and youth employment’, International Journal of Social Economics, 26(1), pp. 415-429.
Montenegro, C.E., and Pagés C. (2004). ‘Who benefits from labor market regulations? Chile, 1960-1998. In James Heckman and Carmen Pagés, eds., Law and Employment: Lessons from Latin America and the Caribbean, pp. 401-34. Chicago: University of Chicago Press.
Neumark, D. and Wascher W. L. (2003). ‘Minimum wages and skill acquisition: another look at schooling effects’, Economics of Education Review, 22(1), pp. 1-10.
Neumark, D. and Wascher W. L. (1992). ‘employment effects of minimum and subminimum wages: panel data on state minimum wage laws’, Industrial and Labor Relations Review, 46(1), pp. 55-81.
Neumark, D. and Wascher W. L. (1994). ‘Employment effects of minimum and subminimum wages: reply to Card, Katz, and Krueger’, Industrial and Labor Relations Review, 47(3), pp. 497-512.
Neumark, D. and Wascher W. L. (1995). ‘Minimum wage effects on school and work transitions of teenagers’, American Economic Review Papers and Proceedings, 85(2), pp. 244-49.
Neumark, D. and Wascher W. L. (2000). ‘The effect of New Jersey’s minimum wage increase on fast-food employment: a reevaluation using payroll records’, American Economic Review, 90(5), pp. 1362-96.
Neumark, D. and Wascher W. L. (2002). ‘State-level estimates of minimum wage effects: new evidence and interpretations from disequilibrium models’, Journal of Human Resources, 37(1), pp. 35-62.
Neumark, D. and Wascher W. L. (2007). ‘Minimum wages and employment’, IZA DP No. 2570, Institute for the Study of Labor, Bonn, German.
Rama, M. (2001). ‘The consequences of doubling the minimum wage: the case of Indonesia’, Industrial and Labor Relations Review, 54(4), pp. 864-81.
Reich, M. and Hall P. (2001). ‘A small raise for the bottom: the impact of the 1996 1998 California minimum wage increases.’ In James Lincoln and Paul Ong, eds., The State of California Labor, 2001, pp. 123-48. University of California Institute for Labor and Employment.
Freeman, R. B. (1994). ‘Minimum wages – again!’, International Journal of Manpower, 15(2), pp. 8-25.
Rosenbaum, P. R., and Rubin. R. (1983). ‘The central role of the propensity score in observational studies for causal effects’, Biometrika, 70(1), pp. 41-55.
Rubin, D. B. (1977). ‘Assignment to a treatment group on the basis of a covariate’, Journal of Educational Statistics, 2(1), pp. 1-26.
Singell, L. D., and Terborg J. R. (2006). ‘Employment effects of two Northwest minimum wage initiatives’, Economic Inquiry, 45(1), pp. 40-55.
Smith, J. and Todd P. (2005). ‘Does matching overcome LaLonde’s critique of nonexperimental estimators?’, Journal of Econometrics, 125 (1–2), pp. 305–353.
Thai-Uyen. 2009. ‘Tăng lương tối thiểu, lương hưu’, Báo Thanh Niên (Youth Newspapers), dated on 06/04/2009
Van der Klaauw, W. (2002). ‘Estimating the effect of financial aid offers on college enrollment: a regression-discontinuity approach’, International Economic Review, 43(4), pp. 1249-87.
Vu-Thieu (2006). ‘Minimum wage in the world and lesson learned for Vietnam’, Report prepared for Ministry of Labor, Invalid and Social Affairs, Vietnam.