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Lost in Transition? Declining Returns to Education in Vietnam

Author

Listed:
  • Tinh Doan

    (University of Waikato)

  • Tran Quang Tuyen

    (VNU University of Economics and Business)

  • Le Quan

    (VNU University of Economics and Business)

Abstract

There is evidence of a rapid increase in the returns to education in Vietnam in the 1990s and 2000s. There was a substantial change in education policy in the 2000s, especially opening up education opportunities for education providers to expand educational facilities and training. These changes could lead to a decline in the returns to education. To provide up-to-date estimates of the returns, we re-visit the returns using updated large-scale survey data to 2014. We apply the Heckman selection estimators to correct for selection bias and find that the return to education in Vietnam increased quickly up to the global financial crisis in 2008/2009 and declined sharply thereafter. This raises at least two questions: is the higher-educated labour force oversupplied or is there a large distortion in the labour market?

Suggested Citation

  • Tinh Doan & Tran Quang Tuyen & Le Quan, 2016. "Lost in Transition? Declining Returns to Education in Vietnam," Working Papers in Economics 16/01, University of Waikato.
    • Handle: RePEc:wai:econwp:16/01
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    economic transformation; returns to education; education supply; wage setting; Vietnam;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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