After the reforms: Determinants of wage growth and change in wage inequality in Vietnam: 1998-2008

The Vietnam ―renovation‖ reforms were implemented during the 1990s, but their full effect was only felt many years later. We present evidence on the developments in real wage growth and inequality in Vietnam from 1998 to 2008. For men, wage growth was underpinned by both increases in endowments of productive characteristics (mainly education) as well as changes in the wage structure (mainly associated with experience) and residual changes. For women, the wage structure effect was the main contributor to wage growth and the most important determinant was the change in the pattern of the returns to experience: younger, less experienced workers enjoyed a premium compared to more experience workers, reversing the previous, opposite pattern. Conventional measures of inequality as well as background analysis show that wage inequality decreased sharply through the 1990s until 2006, but increased subsequently. Over the entire 10-year period, wage inequality increased slightly and more so for women.