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Is There a Public Sector Wage Premium in Vietnam? New Evidence From the Vietnam Household Living Standard Survey

Van‐Phuc Phan & Martin O’Brien

Australian Economic Papers2025https://doi.org/10.1111/1467-8454.12399article
AJG 1ABDC B
Weight
0.41

Abstract

The identification of a public sector wage premium or penalty is of specific interest in fast and emerging economies, particularly those that have transitioned from state controlled to market economies. Using Vietnam as a case study, our initial descriptive statistics analysis showed that average hourly wage rates for public sector workers exceeded those for private sector workers from 2014 to 2020. However, after applying a propensity score matching (PSM) method and controlling for worker and job characteristics, remuneration for a public sector worker was between 17.6% and 27.8% lower than that for a private sector worker. Further exploration of this result revealed that the public sector employs a large proportion of university graduates; however, it pays a lower return to human capital compared to the private sector. The main policy implication from our findings is that the government is likely to face a public sector skills shortage in the future unless it significantly increases the returns to education in its remuneration policies.

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https://doi.org/https://doi.org/10.1111/1467-8454.12399

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@article{van‐phuc2025,
  title        = {{Is There a Public Sector Wage Premium in Vietnam? New Evidence From the Vietnam Household Living Standard Survey}},
  author       = {Van‐Phuc Phan & Martin O’Brien},
  journal      = {Australian Economic Papers},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1111/1467-8454.12399},
}

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Evidence weight

0.41

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.25 × 0.4 = 0.10
M · momentum0.55 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.