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Local governance, education and occupation-education mismatch: Heterogeneous effects on wages in a lower middle income economy

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  • Tran, Tuyen Quang
  • Hung Pham, Hiep
  • Thi Vo, Hoa
  • Thuy Luu, Hong
  • Mai Nguyen, Huong

Abstract

Using data from the first quarter of Labour Force Survey 2018, this paper examines the role of provincial governance, education and job-education mismatch in wage differentials in Vietnam. We find that good provincial governance benefits those in lower wage quantiles more than those in higher wage quantiles. Also, the returns on higher education qualifications (e.g., bachelor’s or master’s degrees) tend to be higher for those at the bottom than for those at the top of the wage scale. However, job-education mismatch has a negative effect on wage earnings in all wage quantiles considered and harms those in lower wage groups more than those in higher wage groups. Our research findings suggest that improving the quality of provincial governance, together with investment in higher education, can be expected not only to increase the income of wage earners but also reduce wage inequality in Vietnam. In addition, education and training systems should be designed to equip workers with the skills and knowledge to match the labour demands of local enterprises in Vietnam.

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  • Tran, Tuyen Quang & Hung Pham, Hiep & Thi Vo, Hoa & Thuy Luu, Hong & Mai Nguyen, Huong, 2019. "Local governance, education and occupation-education mismatch: Heterogeneous effects on wages in a lower middle income economy," International Journal of Educational Development, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:injoed:v:71:y:2019:i:c:s0738059319301774
    DOI: 10.1016/j.ijedudev.2019.102101
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    Cited by:

    1. Hung Van Vu, 2020. "The Impact of Education on Household Income in Rural Vietnam," IJFS, MDPI, vol. 8(1), pages 1-8, February.
    2. Zaiyang Li & Hassan Swedy Lunku & Shaohua Yang & Agus Salim, 2024. "The dynamic interplay of foreign direct investment and education expenditure on Sub-Saharan Africa income inequality," International Economics and Economic Policy, Springer, vol. 21(3), pages 593-616, July.
    3. Tran, Tuyen Quang & Van Vu, Huong, 2020. "Wage earning differentials by field of study: Evidence from Vietnamese university graduates," International Journal of Educational Development, Elsevier, vol. 78(C).
    4. Nguyen, Thanh Quy & Nguyen, Anh Thuy & Tran, Anh Lan & Le, Hung Thai & Le, Ha Hoang Thi & Vu, Lien Phuong, 2021. "Do workers benefit from on-the-job training? New evidence from matched employer-employee data," Finance Research Letters, Elsevier, vol. 40(C).
    5. Tran, Tuyen Quang & Bich Thi Vu, Ngoc & Van Vu, Huong, 2023. "Does job mismatch affect wage earnings among business and management graduates in Vietnam?," Research in International Business and Finance, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Heterogeneous impacts; Provincial governance; Job-education mismatch; Quantile regression; Wage; Inequality;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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