The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam

Nguyen Viet, Cuong (2010): The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam.

Abstract

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
• Language: English
• 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

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