## The Rising Rate of Women Participating in Vietnam’s Labor Force

## Source details

**Canonical URL:** [The Rising Rate of Women Participating in Vietnam’s Labor Force](https://www.imf.org/en/publications/fandd/issues/2018/09/female-labor-force-participation-in-vietnam-banerji)

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## Bibliographic details
- Authors: ANGANA BANERJI, SANDILE HLATSHWAYO, ALBE GJONBALAJ, ANH VAN LE
- Published: September 1, 2018

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### Key findings: Vietnam and Asia-wide trends
- Vietnam’s female labor force participation is exceptionally high: "Almost three-quarters of Vietnam’s female working-age population has been in the labor force for at least two decades."
- Vietnam has maintained female labor force participation of "some 70 percent for more than two decades."
- Female labor force participation is "trending up across Asia," with "on average, female participation rates in Asia have increased by about 6 percentage points since 1990."
- Asia accounts for "60 percent of the world’s people," and the region is "aging rapidly."
- McKinsey Global Institute estimate cited: equality for women in the region could increase collective annual GDP by "12 percent, or $4.5 trillion, by 2025."
- Some Asian countries recorded large gains: "Australia, Hong Kong SAR, Malaysia, New Zealand, and Singapore recorded significant gains—above 10 percentage points—over the past decade."
- Some countries saw declines or stagnation: "India, Indonesia, the Philippines, and Sri Lanka" show declining or stagnant participation; "participation rates have also declined in China and Thailand, albeit from relatively high levels."

### Drivers and mechanisms behind participation gains
- Demographics and aging:
  - Aging tends to lower participation for both men and women, but in Asia "participation has improved for prime-age female workers—those 25–54 years of age."
  - Rising school enrollment delays entry into the workforce for younger workers.
- Economic cycle:
  - "Slower growth or recessions raise unemployment," leading some workers to drop out or delay entry; recent strong growth in Asia supported female participation.
- Structural shifts and labor demand:
  - A "larger service sector (including the public sector) relative to the industrial sector—and higher education levels—stand out as most closely associated with greater female labor force participation."
  - "The openness of the economy (measured by the share of trade in GDP) and the pace of urbanization ... have positive but smaller effects on average."
  - Automation/routinization "hurts female labor force participation in some countries," but not uniformly across Asia.
- Social, institutional, and policy factors:
  - Important drivers include "better infrastructure, more equal labor rights, low adolescent fertility rates, and the availability and affordability of child care, as well as cultural attitudes."
  - Family-friendly policies—maternity protection, child care, part-time employment—"play a positive role" but their effectiveness is limited by "data gaps and the large informal sector" and by varying "institutional capacity to enforce legally mandated provisions."
  - "Labor market rigidities that make it difficult for businesses to let go of workers can have a chilling effect on employers’ decisions to hire female workers."

### Vietnam’s special case: historical and policy context
- Historical shock and labor supply:
  - The Vietnam War caused "a sharp decline in the male population relative to the size of the female population, especially in the prime-age group."
  - The war’s impact "jump-started female labor force participation," analogous to the U.S. experience after World War II.
- Economic reforms and structural change:
  - "Doi Moi reforms in 1986" aimed to build a "socialist-oriented market economy," encouraging private business, ending price controls, phasing out government enterprises, opening to trade, and prompting rapid urbanization.
  - As the economy grew after Doi Moi, "the available supply of labor was predominantly female," and women "stepped into the labor force in greater numbers."
- Education and gender parity:
  - Vietnam implemented Education for All (EFA); "The first EFA plan (1993−2000) emphasized gender equality for all levels of education."
  - "Men and women graduate at roughly the same rate at the postsecondary level" in Vietnam.
  - Vietnam is "one of the few Asian countries to have succeeded in translating gender parity in educational attainment into gender equality in labor force participation rates."
- Legal and family-policy framework:
  - Vietnam has "generous family-friendly laws regarding child care and maternity" and has "strengthened its legal framework to guarantee equality and gender nondiscrimination."

### Limitations, risks, and remaining gaps
- Recent gains may be cyclical: "Recent successes have been partly the result of strong economic conditions, which may not be able to support female labor force participation once the economic cycle turns."
- Structural headwinds: "The forces of aging and digitization" could reverse recent gains.
- Remaining gender-equality issues beyond participation: "pay gaps, high-level representation, and access to wage employment" need improvement even in high-performing countries such as Vietnam.
- Policy effectiveness constraints: effectiveness of family-friendly and equality laws depends on "institutional capacity" and is constrained by "data gaps and the large informal sector."

### Policy implications and recommendations
- Sustain strong economic growth to support female labor force participation.
- Continue expanding access to high-quality education and preserve gender parity in educational attainment.
- Implement and effectively enforce family-friendly policies (maternity protection, child care, part-time employment) tailored to country-specific constraints, recognizing enforcement capacity varies across countries.
- Address labor market rigidities that deter hiring, including female hiring.
- Spread successful policies and institutional practices across Asia while recognizing heterogeneity in development stage, labor market structure, and cultural norms.

*Content derived from: The Rising Rate of Women Participating in Vietnam’s Labor Force, F&D Magazine, September 2018.*

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_Source: https://www.imf.org/en/publications/fandd/issues/2018/09/female-labor-force-participation-in-vietnam-banerji_