Labour market effects of social insurance reform in Vietnam

Abstract

This research provides the first evidence on how labour supply and earnings may adjust to the expansion of insurance benefits under the 2014 Social Insurance Law reform. The data for this study come from the Vietnam Labour Force Surveys. Both difference-in-differences and fixed-effect models are used. The estimated results reveal negative reform effects on the work duration and earnings of both sexes and for both rural and urban areas. They also point out some definite effects on different groups of local and migrant workers. However, little evidence on sick leave impact is found. The link between social insurance status and the labour market outcomes is scrutinized as well. The findings indicate that urban workers of both sexes benefit from accessing to compulsory insurance with respect to earnings, but only rural female workers do it. Moreover, these effects come mostly from groups of non-migrant workers.

Keywords:

• Social insurance
• reform
• migration
• urban
• rural
• work hours
• income

Disclosure statement

On behalf of all authors, the corresponding author states that there is no conflict of interest.

Additional information

Notes on contributors

Thanh-Long Giang

Thanh-Long Giang, Ph.D. is currently an Associate Professor at National Economics University; a Research Fellow at Thang Long University; and a Senior Researcher at Institute of Social and Medical Studies (ISMS). All is in Hanoi, Vietnam. Prof. Long’s research interests include the labor economics and social insurance. His research outcomes have been published widely, including Asian Economic Journal; Asia Pacific Economic Literature; Development and Change; International Social Science Journal; and Social Science and Medicine. Prof. Long was a member of the drafting team for the Vietnam’s Social Protection Strategy 2011-2020; a key member of taskforce and research group for reforming social assistance system in Vietnam 2017-2021 and social insurance reforms in 2017-2025 with a vision to 2050, both were under Ministry of Labour, Invalids and Social Affairs (MOLISA). He earned a MA degree in public policy from Hitotsubashi University, Japan; a PhD degree in public policy from National Graduate Institute for Policy Studies (GRIPS), Japan.

Kieu-Dung Nguyen

Kieu-Dung Nguyen, Ph.D. is a lecturer at FPT School of Business and Technology, FPT University, Hanoi. She received her Ph.D. degree in Economics from the State University of New York, Albany, U.S.A. Her research and publications focus on labor economics, health economics, economics of the family, industrial organization, science and technology, development economics, and public policy. She has also participated in many World Bank, Asian Development Bank, USAID, and OECD policy research projects in Vietnam.