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Local Competitiveness and Labour Market Returns in a Transition Economy: Evidence from Vietnam

Author

Listed:
  • Tinh Doan

    (University of Economics and Business, Vietnam)

  • Tran Quang Tuyen

    (University of Economics and Business, Vietnam)

  • Hien Nguyen

    (International Labour Organization)

Abstract

This paper examines the relationship between the quality of provincial governance and labour market returns in Vietnam. We find that better provincial governance has a positive effect on labour market wages for wage-earning workers. The finding is consistent across estimators, even after controlling for worker characteristics, geographic regions, urban context, economic sector and industry type. A better competitive environment for business attracts more firms to enter the market, which in turn creates greater demand for labour. Subsequently, higher demand for labour pushes up wages. Our unique contribution is that we considered the influence of provincial governance on the business environment and labour market returns.

Suggested Citation

  • Tinh Doan & Tran Quang Tuyen & Hien Nguyen, 2018. "Local Competitiveness and Labour Market Returns in a Transition Economy: Evidence from Vietnam," Working Papers in Economics 18/06, University of Waikato.
    • Handle: RePEc:wai:econwp:18/06
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    References listed on IDEAS

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    More about this item

    Keywords

    economic transition; institutional competitiveness; labour market returns; Vietnam;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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