Role of Individual Characteristics and Policies in Driving Labor Informality in Vietnam
IMF Working Papers, December 11, 2020
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- Role of Individual Characteristics and Policies in Driving Labor Informality in Vietnam
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Bibliographic details
- Authors: Era Dabla-Norris, Giovanni Ganelli, Anh Thi Ngoc Nguyen
- Published: December 11, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513563862.001
Summary
- Using data from the Vietnam Labor Force Survey, the paper examines:
- (i) the nature of labor informality and transitions from formal to informal employment status and the role of worker characteristics;
- (ii) the empirical likelihood of being in informal employment and the policy determinants of informality using within-in country variation in the business climate and governance; and
- (iii) whether different policy reforms have a differential impact on workers.
- The analysis sheds light on how individual characteristics and policy impediments contribute to high levels of informality and points to the need for a comprehensive agenda to tackle informality.
Data and Methodology
- Data source: Vietnam Labor Force Survey.
- Analytical focus: granular look at drivers of labor informality, transitions between formal and informal employment, within-country variation in business climate and governance, and heterogeneous impacts of policy reforms on workers.
Key Findings
- Identifies the nature of labor informality and transitions from formal to informal employment status and the role of worker characteristics.
- Estimates the empirical likelihood of being in informal employment and links informality to policy determinants using within-country variation in the business climate and governance.
- Documents that different policy reforms have differential impacts on workers.
- Concludes that both individual characteristics and policy impediments contribute to high levels of informality and that a comprehensive agenda is needed to tackle informality.
Policy Implications and Recommendations
- A comprehensive agenda is required to address high levels of labor informality, reflecting both:
- reforms that improve the business climate and governance at subnational levels, and
- policies that consider heterogeneous impacts on different worker groups as revealed by transitions and worker characteristics.
Content in this bundle
- Working Paper