Nina Torm: "Firms and Workers in Transition: A Series of Micro Studies on Vietnam "

"Firms and Workers in Transition: A Series of Micro Studies on Vietnam"


This thesis is based on survey data of Vietnamese small and medium manufacturing enterprises and consists of four self-contained chapters which can be read independently. The first paper analyses the benefits associated with firm formalization and shows that becoming legally registered results in higher profits and investment, increased credit access, and improved contract conditions for workers.

The second paper disentangles the wage gap between formal and informal firms and finds that the majority of the wage differential is due to differences in firm characteristics between formal and informal firms, especially firm size, certain workforce characteristics, and location.

The third paper uses matched employer-employee data to show that union membership is associated with higher wages and an increased likelihood of receiving social insurance. The results are particularly strong for workers in Southern firms, suggesting that historical institutional differences between the North and South of the country prevail.

The fourth paper, also based on matched employer-employee data, reveals that workers who are hired informally receive a wage premium compared with workers who have obtained their job through a more formal recruitment method. In terms of policy implications, some of the main lessons drawn from the papers include; the need for enhanced information on formalization requirements and procedures, as well as an increased focus on enforcing compliance with labour related regulations.