Gender Gap in Earnings in Vietnam: Why Do Vietnamese Women Work in Lower Paid Occupations?
The Gender Gap in Earnings in Vietnam: Why Do Vietnamese Women Work in Lower Paid Occupations report from the World Banks analyses the gender earnings gap and explores why women choose to work in lower paid occupations.
The study uses a combination of data from Vietnam’s Labour Force Surveys (LFS), the Young Lives Survey and the World Bank’s STEP Skills Measurement Program to answer the following questions:
- How large is the earnings gap between men and women in Vietnam?
- What explains this gap? Does the fact that women and men tend to choose different types of occupations and industries play a role?
- What explains the fact that women consistently choose to work in lower paid occupations? The study explores three hypotheses:
- Do social norms about which jobs are appropriate for men and women shape aspirations and educational choices at a young age?
- Do women face greater difficulties in finding employment in their field of study when they are transitioning from school to work?
- Do women forego higher-paying occupations and industries in order to have greater flexibility: shorter hours and better leave?
- Annual data1 from the LFS between 2011 and 2014 suggests that women earned, on average, 3,000,000 Dong (about USD 1302) less than men each year, which is about a month’s income. Men earned more than women both in the state and non-state sectors and in agricultural and non-agricultural industries.
- This gap remained constant over the course of the four years of LFS data used. The gap in earnings is present across all age groups, widening around child-bearing age and spiking in the 55-59 age cohort, around retirement age for women (at 55). It reduces again when men retire at 60.
- Difference in education could plausibly explain earnings gaps. However, in Vietnam, women earn less than men despite having higher levels of educational attainment. Fig. 3 panel B shows that for women and men with the same levels of education, the earnings gap becomes even larger.
- Adding occupation and industry to the analysis, the study finds that earnings gaps of men and women with the same level of education, working in the same occupations and industries are lower than the earnings gap between similarly educated men and women. This suggests that an important factor in emergence of the gender earnings gap is women’s tendency to work in lower paid occupations and industries than men.
- The analysis suggests that women are more willing than men to forego higher salaries to secure jobs with better weekly hours, leave, insurance and having a contract. A factor likely to be driving this preference is the unequal distribution of household work. Indeed, women in Vietnam spend 14 hours per week more than men on housework and child or elderly care.
- This evidence suggests that two types of interventions have the potential to bridge the gender earnings gap in Vietnam.
- First, interventions that enable women to better balance household and market roles without incurring a large labour market cost may help address the issue- for instance, making child care services available, affordable and easily accessible, or enabling flexible working options.
- Second, interventions encouraging a more equitable distribution of the household care- and work-burden hold promise – such as legislative or private sector initiatives making parental leave more gender neutral as well as programs aimed at shifting men’s attitudes towards household work.
- Key Findings
- What did we do?
- What did we find?
- What are the policy implications?