This paper compares wages and non wage benefits earned by Vietnamese public employees toearnings in the private sector from 1993 to 2006. We document the fact that the advantageof public sector workers did not decrease, but rose considerably after the transition to marketeconomy. We use a simple, yet innovative method to distinguish between the effect of changes inworkers characteristics and that of changes in returns to these characteristics in the two sectors,while taking into account the effect of unobserved workers characteristics along with observableones. We show that changes in the returns to skills are the driving factor.