Imbert, Clément2013-04-102013-04-102013-01https://hdl.handle.net/10986/13130In contrast with the typical transition to a market economy, earnings inequality in Vietnam between 1993 and 2006 appears to have decreased, and the earnings gap in favor of public employees appears to have widened. The paper uses a comparative advantage model to disentangle the effect of sorting workers across sectors from the effect of the differences in returns to workers' skills. The selection of the best workers into the public sector is clearly an important component of the explanation for the public-private sector earnings gap, but the widening of this gap over time is primarily due to changes in the compensation patterns. The paper finds that, in the 1990s, public employees were underpaid compared with their earning potential in the private sector whereas, in the early 2000s, public employees earned similar returns to their comparative advantage in the public and private sectors. The increasing homogeneity in returns to skills in the Vietnamese labor market appears to explain both the increase in the public-private pay gap and the decrease in overall inequality.en-USCC BY 3.0 IGOATTRITIONCAPACITY BUILDINGCOMPARATIVE ADVANTAGECONSTANT RETURNSDATA MODELDESCRIPTIVE STATISTICSDEVELOPMENT ECONOMICSDOMESTIC FIRMSEARNINGEARNING INEQUALITYEARNINGS INEQUALITYECONOMETRIC MODELSECONOMIC DEVELOPMENTECONOMIC REVIEWELECTRICITYEMPLOYEEEMPLOYMENT HISTORIESEMPLOYMENT HISTORYFINANCIAL CRISISHOUSEHOLD SURVEYSINCREASING FUNCTIONINEQUALITY-INCREASING EFFECTLABOR ECONOMICSLABOR MARKETLABOR MARKET REFORMSLABOR MARKET SEGMENTATIONLABOR MARKETSMASSIVE LAYOFFSMEASUREMENT ERROROCCUPATIONOCCUPATIONSOLDER WORKERSPOLICY DISCUSSIONSPOLICY RESEARCHPOLITICAL ECONOMYPOOR COUNTRYPREVIOUS SECTIONPRIVATE COMPANIESPRIVATE EMPLOYMENTPRIVATE ENTERPRISESPRIVATE FIRMSPRIVATE SECTORPRIVATE SECTOR EARNINGSPRIVATE SECTOR EMPLOYEESPRIVATE SECTOR JOBSPRIVATE SECTOR WORKERPRIVATE SECTOR WORKERSPRIVATE SECTORSPUBLICPUBLIC EMPLOYEESPUBLIC EMPLOYMENTPUBLIC ENTERPRISESPUBLIC SECTORPUBLIC SECTOR EMPLOYEESPUBLIC SECTOR PAYPUBLIC SECTOR REFORMPUBLIC SECTOR WAGEPUBLIC SECTOR WORKERPUBLIC SECTOR WORKERSPUBLIC SECTOR WORKFORCEPUBLIC WAGEPUBLIC WORKERSQUANTILE REGRESSIONSRELATIVE IMPORTANCERURAL WORKERSSERIAL CORRELATIONSIGNIFICANT DIFFERENCESSIGNIFICANT EFFECTSOCIAL CAPITALSTATE EMPLOYEESTOTAL EMPLOYMENTTOTAL LABOR FORCEUNSKILLED WORKERSURBAN AREASVOCATIONAL TRAININGWAGE DIFFERENTIALWAGE DIFFERENTIALSWAGE DISTRIBUTIONWAGE EMPLOYMENTWAGE GAPWAGE INEQUALITYWAGE PREMIUMWORKERWORKERSYOUNGER WORKERSWorld Bank10.1596/1813-9450-6344