Direct and spillover effects of social insurance reform: evidence from Vietnam

Abstract

The introduction of the 2014 Social Insurance Law is a key reform of social protection in Vietnam. This article may be the first work quantifying the effects of the law’s introduction on family welfare. The propensity score matching combined with the difference-in-differences techniques is used to reduce bias. The study indicates that the generosity of the benefits provided by the law negatively affected the work duration and earnings among couples when only the wife is insured. In contrast, their sick leaves were positively influenced. Concerning spillover effects, wives significantly responded to the change of benefits in terms of work duration and earnings. The study also attempts to identify the mechanism underlying the effects by disaggregating them by family income and couples’ ages. The results suggest that low-income couples and young couples are sensitive to the law’s introduction. The article integrates knowledge from the fields of labor economics, social welfare, and public policy.

Keywords:

• Social insurance
• sickness absence
• cross effect
• spillover effect
• spousal effect
• labor supply
• income

Data availability statement

The data supporting the findings of this research are available from the Vietnam General Statistics Office, upon reasonable request.

Disclosure statement

No potential conflict of interest was reported by the authors.

Table

Notes

1 Other reasons include training/education, personal reasons, holidays/annual leaves, newly started work, shift-work, off-season, starting/changing job, and family reasons. Like D’Amuri, we did not consider the reasons that workers cannot control. Pregnancy-related leave was also treated as sick leave in this study.

Additional information

Notes on contributors

Van-Anh Thi Tran

Van-Anh Thi Tran is a Lecturer of the Faculty of Finance and Banking, University of Economics and Business, Vietnam National University-Hanoi, Vietnam. Her research interests include Finance, Labor Economics, and Public Policy. She got her Ph.D. degree in Economics from Hiroshima University, Japan.

Kieu-Dung Nguyen

Kieu-Dung Nguyen is a Researcher of the Institute of Theoretical and Applied Research, Duy Tan University, Hanoi, Vietnam. She received her Ph.D. degree from the State University of New York, Albany, U.S.A. Her research interests include Labor Economics, Economics of the Family, Social Welfare, and Public Policy.

Duc-Thanh Nguyen

Duc-Thanh Nguyen is the Chief Advisor of Viet Nam Institute for Economic and Policy Research (VEPR), a think tank he co-founded in 2008 under the University of Economics and Business, Vietnam National University-Hanoi, Vietnam. Dr. Nguyen was a member of the Economic Advisory Group to the Vietnamese Prime Minister during the period 2011–2016. He is the Founder and Chief Editor of the influential Vietnam Annual Economic Reports, which has been annually published by VEPR since 2009.

Duy-Dat Nguyen

Duy-Dat Nguyen is the Dean of Faculty of International Business and Economics, Thuongmai University, Hanoi, Viet Nam. He got his M.A. degree from ISS (The Hague, The Netherland) and his Ph.D. degree from Thuongmai University. His interested fields are International Economics, International Business and Investment, Development Economics, Labor Economics, Public Economics and Policy.