This report is the second from a multi-year project examining how multinational
enterprises (MNEs) affect wages and human resource development in Asia’s large developing
economies. This report focuses on Vietnamese enterprises (firms), utilizing detailed
information on the paid employment and wages by occupation, and on the educational
background of workers to compare wages in two groups of MNEs, wholly foreign firms
(WFs) and joint ventures (JVs).2
State-owned enterprises (SOEs) also play prominent roles in
some Vietnamese industries. Correspondingly, the papers focus on evaluating the scope of
WF-private, JV-private, and SOE-private wage differentials, and on comparing how these
differentials vary among industries and worker occupations.
Chapter 1 examines wage differentials among medium-large (20 or more employees) WFs,
JVs, SOEs, and domestic private firms in Vietnamese manufacturing. The analysis focuses on
2009 because it is possible to examine wage differentials after accounting for the influences
of two measures of worker quality, educational background and occupation. Simple
comparisons in large samples of 11 industries combined indicate that averages wages in JVs
were about 92 percent higher than in private firms in 2009, SOEs and WFs paid 57 and 54
percent more than private firms, respectively. Corresponding, conditional differentials thatcontrol for the influences of worker education and occupation, as well as capital intensity, size,
and shares of female workers, were substantially smaller, but positive and significant in large
samples. Wage levels and differentials varied substantially among industries. Conditional
differentials were positive and significant for WFs and JFs in most of the 11 industries
examined, but estimates of SOE-private differentials were insignificant in most industries.
Robustness checks using 2007 data could not account for worker occupation, but revealed
results similar to those for 2009.
Chapter 2 examines wage differentials for four types of workers employed by mediumlarge
WFs, JVs, SOEs, and domestic private firms in Vietnamese manufacturing in 2009.
When all sample firms were combined, unconditional JV-private and WF-private wage
differentials were 106-124 percent for managers, 78-87 percent for professionals and
technicians, 56-68 percent for clerical and support workers, and 22-48 percent for production
workers. Corresponding, conditional wage differentials which account for the influences of
worker education and sex, in addition to firm capital intensity and size, were positive and
usually significant, but smaller, 72-78 percent for managers, 32-36 percent for professionals
and technicians, 23-28 percent for clerical and support workers and 15-16 percent for
production workers. SOE-private differentials were all much smaller. When estimated at the
industry-level, conditional WF-private differentials were positive and significant for most
occupations and industries. JV-private differentials were also positive and significant in most
industries for highly paid managers or professionals and technicians, but not for lowly paid
clerical and support workers or production workers. Most SOE-private differentials were also
insignificant when estimated at the industry level. In short, there was a strong tendency for
MNE-private differentials to be larger for managers than for professionals and technicians,
and a somewhat weaker tendency for differentials to be larger for professionals and
technicians than for clerical and support workers.