Returns to education revisited: Evidence from rural Vietnam

Abstract

AbstractThis study revisits returns to education in three Vietnamese rural provinces, using data on seven waves between 2007 and 2017, taken from the Thailand Vietnam SocioEconomic Panel (TVSEP). We deploy various approaches to address the endogeneity problem, and the findings show that individuals with a lower secondary school diploma are likely to earn a higher wage income. The present research also provides evidence of heterogeneity in the rate of return in terms of sex and ethnicity. In particular, men need a lower secondary school diploma, while women require an upper secondary school diploma to improve their wage income. Similarly, the relationship between a lower secondary school diploma and wage income is found among the majority of the Kinh people, but ethnic minorities do not enjoy this benefit. Overall, the benefits of education are crucial among the labor force, especially for vulnerable groups, such as women and ethnic minorities, who would benefit from the support of policymakers.

Keywords

• Vietnam
• returns to education
• rural
• panel data