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Lost in Transition? Declining Returns to Education in Vietnam

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Abstract

Evidence exists of a fast increase in the returns to education in Vietnam in the 1990s and 2000s. However, there was a huge change in education policy in the mid-2000s, opening up opportunities for education providers to expand enrolment. This may lead to a decline in the returns to education in later years when the changes have generated sufficient effect. To provide up-to-date estimates of the returns, we re-visit the returns using updated large survey data up to 2014. We apply the OLS and Heckman selection estimators which can correct for selection bias and find that both estimators provide a consistent trend of the returns, which increased quickly up to the global financial crisis in 2008/2009 and then declined afterwards. This raises a question whether higher educated labour force is oversupplied.

C’est demonstrable qu’il y a eu une augmentation rapide des rendements de l’éducation au Vietnam dans les années 1990 et 2000. Cependant, il y a eu un énorme changement dans la politique de l’éducation, en particulier l’ouverture des possibilités d’éducation au milieu des années 2000 : ce qui a eu comme effet que les fournisseurs d’éducation ont augmenté le chiffre d’inscriptions. Cela pourra conduire à une diminution des rendements de l’éducation dans les années suivantes, lorsque les changements auront généré un effet suffisant. Afin de fournir des estimations à jour des rendements, nous revisitons les résultats en utilisant des données mises à jour d’enquête à grande échelle jusqu’en 2014. Nous appliquons les estimateurs de sélections MCO et Heckman qui peuvent corriger les biais de sélections et constater que les deux estimateurs fournissent une tendance constante des rendements, qui ont augmenté rapidement jusqu’à la crise financière mondiale en 2008/2009, puis ont diminué par la suite. Cela soulève la question de savoir si la main d’œuvre plus scolarisée est surchargée.

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Figure 1

Source: World Development Indicators, http://data.worldbank.org/indicator/SE.TER.ENRR/countries/VN-4E-XN?display=default

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Authors and Affiliations

  1. University of Economics and Business, Vietnam National University, Hanoi, Vietnam

    Tinh Doan, Quan Le & Tuyen Quang Tran

  2. University of Waikato, Hamilton, New Zealand

    Tinh Doan

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  1. Tinh Doan
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  2. Quan Le
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  3. Tuyen Quang Tran
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Correspondence to Tuyen Quang Tran.

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Doan, T., Le, Q. & Tran, T.Q. Lost in Transition? Declining Returns to Education in Vietnam. Eur J Dev Res 30, 195–216 (2018). https://doi.org/10.1057/s41287-017-0080-9

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  • DOI: https://doi.org/10.1057/s41287-017-0080-9

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