The impacts of education on earnings in the case of vietnam

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM TH E NETHERLANDS VIETNAM — THE NETHERLANDS PROJECT FOR M.A IN DEVELOPMENT ECONOMICS THE IMPACTS OF EDUCATION ON EARNINGS IN THE CASE OF VIETNAM BY NGUYEN XUAN CUONG MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, NOVEMBER 2008 CHAPTER I: INTRODUCTION 1.1 Introduction 1.2 Problem statements 1.3 Research objectives 1.4 Research questions I Research hypothesis l Data and methodology 1.7 Thesis structure CHAPTER II: LITERATURE REVIEW I Definition 2.2 Theoretical framework 2.2 Mincer’s Early Work on experience, 1958 2.2.2 The Schooling — Earning Function 2.2.3 Theory of human capital 10 Empirical studies 2.4 Comments on the theories and empirical studies 15 2.5 Modeling 16 CHAPTER III: ECONOMIC, EDUCATION AND LABOUR MARKET IN VIETNAM 3.1 Economic in Transition 17 3.2 Population and labor force 3.3 ucation achievements Ed 2i 3.4 Education expenditure 21 3.5 Employment and income 22 3.5 I Employment 22 3.5.2 Income .23 3.6 Factors affect on earnings .25 3.6 1Education 26 3.6.2 Experience 26 3.6.3 Gender 28 3.6 Region 28 3.6 Economic sectors 28 CHAPTER IV: DATA AND METHODOLOGY Statistic analysis 29 4.2 Regression model of earning function 32 4.3 Regression results 35 4.4 Estimate coefficients 4.4 Gender disparity in returns to education 40 4.4.3 Regional disparity in returns to education 44 CHAPTER V: POLICY IMPLICATIONS AND CONCLUSIONS 5.1 Conclusions 46 5.2 ommendations Rec 47 5.2 Recommendations for employees .47 5.2.2 Recommendations for policy makers 48 5.3 mitations and areas for 1‘uriher research Li 48 LIST OF TABLES Table : Vietnamese’s population 19 Table 2: Literacy of population age 15 and over by area, region have certificate 20 Table 3: School enrollment trend in Vietnam 2000 - 2004 21 Table 4: The proportion education expenditure in GDP 2000 — 2005 22 Table 5: Education expenditure of Vietnam comparing with other countries .22 Table 6: Monthly average income per employee in local state sector at Current prices by region (thousand VND) 25 Table 7: Descriptive statistic 32 Table 8: Average earnings by education Level by Region and Sex 32 Table 9: Description variables used in the model 34 I‘ able ltl: Vietnam Larning function • Table 12: Vietnam: Earnings functions by Gender 41 Table 13: Vietnam: Extended Earnings functions by Gender .42 Table 14: Vietnam: Earnings functions by sector of employment (both sexes) 43 Table 15: Vietnam extended earning function by economic sector .43 able 17: Vietnams: Extended earnings liinctioii bJ Region The impacts of education on earnings In the case of Vietnam l ABSTRACT The labor market, earnings and the return to education have been strongly impacted after Vietnam transiting into the market economy from planned economy especial since the Doi Mot policy was carried out To exam the impacts, in this paper we attempt to analyze the returns to education on earnings in 2004 by analyzing the monetary benefits of schooling in Vietnam Our estimates demonstrate that there is increasing returns of earning on schooling which consistent with human capital theory and our observation to Vietnam labor market CHAPTER I: INTRODUCTION INTRODUCTION The human capital thet›y v'i eii s earnings ‹›t’ a v tirker as returns in his or her knowledge capital that hasc dcx cltiped through J°ears of“ sch‹i‹ilinp an‹J ii ork experience F.arl¿ ii orks of l3ecker and Chisii ick (Secker and Cliisiv ick 1966) laid the foundation ‹if this literature and later Mincer (Mincer 1974) propose-d an c-inpi rical appr‹›ach t‹› distinguish the c‹intri b u1ion of’ schooling and experience in u age earnings "I he wel l -kntixvii model of Miiicer is Human capital earnings 1iincti‹›n; include the log ‹›f indiv idual earnings as the explained variables and sch‹›oling and experience are as explanatory x'ariab1es Recent studies of c-‹1ucati‹in and earning uere almost embedded in the lranieiv ork of’ Minccr and coiribincd is ith different contexts with additional important ct’ the household and comiri unit›’ characteristics institutional 1‹ict‹›rs and other obscrv'able attributes such as gender eciinomic sectors rcgi‹›ns Car‹l (Car‹l 1999) surx'eJ' the literature on the causal relationship between education ‹ind eaminy "Fhis Paper 1‹icuses on Vietnam Since Vietnam has succc-ssliil in ec(inom ic reform when the cc‹›noniJ ix as transl crred 1r‹iin centrally planned t‹› market cc‹›ntiniy in 1996, the economic transition has led to certain issues in the labor market education was determined important in earnings, the hit:her the lex el of education one get, the higher is that person receives starting salary and the steeper the rise in earning during working life In centrally planned ccontimies this relatitin i\”dS limited in Lao people’s democratic Republic (Phanhpakit and Education and Earnings in Lao PDR 2006) or in China (Xie and Human 1996) but thet' ten to in creasc- as market economy such as in I lung Kting (T‹›ny Chan 1996) and Czech Republic and Slovakia (Chase 1998) This paper examines the returns to e‹lucation in Vietnam on the basis of earnings data were collected b¿ Vietnam Living standard Surve¿’ in the year 2004 J VI.SS 2004), It is to attempted to estimate differential returns to schooling f‹›r Vietnamese, male and male, rural and urban areas and also betw een the public and private sector It is hope-d to provide a bench mark to examine the effects of market liberalization and education retorm In Vietnam 1.2 Problem statements Since 1996, from the centralized planning economy changed to market oriented economy Vietnam has a strong development with more openness and further integrated into the World economy, Vietnam has strong integration into the global economy, exchanging goods, services, Capitals, technologies have increased rapidly and strongly leads to change Vietnam’s society and economy In the year 2006 Vietnam officially became to the World Trade Organization member (WTO) that helped to create more new opportunities to promote export goods and services which Vietnam has advantages, this circumstance helped Vietnam absorbs Foreign Direct Investment (FDI) especial in capital and technologies With the integration into the World economy, Vietnam has more chances to involve in the international labor divislon process, the sector which Vietnam has competitive advantages According to integration to the World economy, Vietnamese have chances to access to advanced technologies and modern management techniques with increasing labor productivity and 1.3 increasing wages Accompany with that more challenges face low skilled workers; lower earnings, since the gape of earning between skilled and unskilled are bigger Research objectives The object of this studying is aimed to exam the impact of education on earnings during the transition period, and it is also aimed to identify difference of educations impact between gender, economic sectors, and regions To get these objects, the rates of returns to education instrument and data which survey in the year 2004 are used Although, there were many previous researches have mentioned about the education and earnings in Vietnam, But each research has difference interpretations which based on the characteristics of the economy at each previous This research focuses on the impact of education on earnings in the case Vietnam has almost moved to market economy and integrated the World economy Moreover, the research focuses on the following objectives: To analyze the necessa ry or the important of education, especially higher education on the economy, and identify what the factors affect earnings most strongly To evaluate present quality of Vietnam’s education as well as how much education satisfies the labor market 1.4 Research questions From the objects of the research have mentioned above, the main questions could be made: Do education levels significantly determine earnings of wage earners? What factors affect on wage earners, such as; gender, Region, Economic sector and experience? 1.5 Research hypothesis - Education has positive relationship with earnings Experience has positive relationship with earnings - Male has higher earnings than female - Working in urban earn higher than in rural 1.6 Data and methodology Most of data is collected from secondary Vietnam Living Standard Survey 2004 The research method is used both descripti v e and mult ii ariatc analy sis In the inultiv’ariate analysis an econometric techniciuc iv ill be applied and the basic of human capital eai nin us functi‹ins by Mincei is need to calculate twe rate ‹if return t‹› education Sampling frame v ill be created from VLSS database 1.7 Thesis structure Thesis is organized into live chapters The first Chapter is introduction, second chapter is overview ‹›f human capital theories and empirical studies the third chapter is ‹described briefly Vietnam ccononi; population, eiriployment and education, and the fourth chapter mentions the methodt›louj' ct“ study ‹ind regression iriodel ot’ the impact ct“ education (›n earnings and describes x-ariables and data, ChaJater 1iv’c including collusions which based on the results of’the regression and mentions some appropriate solution to the authorities ix ith concerning on education aloha1iz.ation shall brin u more opp‹iriunities for eiriploj ees but these opportunities icconipan j is i tli cli illcn ges of mom rapid change ct technologies iiianagei rient it means that cheap labor is n‹› l‹›n pcr as adx’antahc, instead p‹›‹›tl ‹juali t; ‹›1’ labor s‹› Vietnamese cmploj ecs e bcen traincd and retrained to increase at prc›l cssional and skill level Recommenilations for policy makers As discussed abox e primary' education and university' education are the ni‹›st profitable but is itli present direct costs is a heavJ hurden for most families especially mm the poor Vietnam’s policJ' makers may consider direct subsidization ot’ p‹ior primary schtJ tiling agC Children t‹› ensure that theJ enr‹ill in schotil and remain enrolled F.ducatitin an‹J i t›cat itin training sht›uld concentrate ‹›n skills an‹J c‹inipetenc¿ shilling fr‹›m occupational training to skills and multi-skills training w idening subjects of training to attain high compati bilitx It is needed to establish training s; stem for practical technical skill ii orkers ve ilh different lex'c•ls (Scum-skilled skilled and high skilled lei’cl) and training must be ‹demand driven and als‹› nc-edcd 1‹›r plannin u antl projectit›n ‹›f netii ‹irk ‹›1’ Jiractical technical training institutions inveslin u in a number of technical and high tech schools in sortie critical econoiiiic locations Quality of the Vietnam’s education is still low, its theoretical lack of practice, infrastructures (hard and software) are in poor condition due to that the quality of graduate students could not satisfy the demand of business Although Vietnairiese Government has invested more money into education system but not enouch to modernize education sJ stem to iriodernize its education system Vietnamese Government should reassess pricing policx to increase cost recovey at the higher education level t‹i reduce the gap bet›vcen social and privatc rates ‹›1’return as well as io reinvest into education system intrastriicture Limitations and areas for further research There are also some limitations at this study /\s mentioned in chapter on the scope of“ the thesis our sample is conllned to onlJ ihe wage earners so that all results are 48 conditional upon carrier ii liile or er 811 pei cen t o1’Vietnam labor foi ce is seJ t-em pl oj ed and manJ hai’e multiple job An analJ sis ct’ the other sectors ‹›t“ the labor niarkc-I ii il J gix e more c‹iiriplete picturc tit the impact ct eclucati‹›n but is bcJ end the scope o1’this thesis The iinplication ‹in returns to vocational trainlllf2 lS restricted can not he assessed because there is no obseri ation in sample Due to thc limited size of the extracted data sct the research has not analj zed thti ugh taking into consideration the differences between seven geographical regions and bctw ecn industries Sector impact ‹›n ii t›rkcr’s earnings may be caused by’ dit’fci ent w ork intensit; of“ the industw° Industr¿ impact also michl come lroin price distortions due to various policies most notably trade protection policies Another limitation is in the analj sis of economic sector disparities J’he rate tif return to education to the public sector worker and priv'ate sector worker should take into account the selection bias ct“ scctor choice Probability ct’ working in an economic sector should be considered as end‹›gentius l ct‹›r and trill in liirmation maximum likclihtiod should be estimated disparities in the rate of return to education between gender, scctoi or region can also be liirther analj zed to determine the possi bJ c and - significant factors that cause such dit’fcrenccs The results ct"these studies will claril}v recommendations and irieasurcs t‹ir the u‹ivcrnmcnt to narrow Inc income and education gap between difterent groups 49 APPENDIX I 1.1 Vietnam: Earnings function Dependent Variable: LNEARNING Method: Least Squares Date: 09/24/08 Time: 20:30 Sample: 2202 Included observations: 2202 Variable Coefficient Std Error I-Statistic Prob SCHOOLING MALE RURAL PUBLIC EXPERIENCE EXPERIENCE2 C 0.058945 0.180723 0.490030 0.120912 0.016706 -0.000498 7.994241 0.004770 0.040197 0.033793 0.035945 0.005905 9.08E-05 0.108425 12.35721 4.495946 14.50100 3.363818 2.829046 -5.486380 73.73080 0.0000 0.0000 0.0000 0.0008 0.0047 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.339778 0.337974 0.683486 1025.400 -2283.027 1.771842 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 8.953302 0.840024 2.079952 2.098063 188.2735 0.000000 1.2 Vietnam: extended earnings function Dependent Variable: LNEARNING Method: Least Squares Date: 09/24/08 Time: 20:58 Sample: 2202 Included observations: 2202 Variable Coefficient Std Error t-Statistic Prob PRIMARY 0.119037 LOWSECONDARY 0.154019 UPPERSECONDARY 0.402287 COLLEGE 0.777372 UNIVERSITY 0.829534 MALE 0.213584 RURAL 0.485103 PUBLIC 0.120566 EXPERIENCE 0.021955 EXPERIENCE2 -0.000610 C 8.198360 0.050260 0.048357 0.056040 0.100293 0.071138 0.040630 0.033649 0.036002 0.005949 9.15E-05 0.105850 2.368401 3.185011 7.178566 7.750980 11.66091 5.256830 14.41667 3.348891 3.690582 -6.674568 77.45238 0.0180 0.0015 0.0000 0.0000 0.0000 0.0000 0.0000 0008 0.0002 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.346669 0.343688 0.680530 1014.698 -2271.475 1.789992 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic 8.953302 0.840024 2.073093 2.101552 116.2586 Prob(F-statistic) 0.000000 APPENDIX II , 2.1 Vietnam: Earnings function of Male in Urban Dependent Variable, LNEARNING Method: Least Squares Date: 03/26/08 Time: 21:58 Sample: 578 Included observations: 578 Variable Coefficient SCHOOLING 0.092111 EXPERIENCE EXPERIENCE2 C R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.019187 -0.000504 8.306826 0.270544 0.266732 0.703246 283.8742 -614.6552 1.784589 Std Error I-Statistic Prob 0.007815 11.78575 0.0000 0.012804 0.000211 0.216034 1.498505 -2.387176 38.45154 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 0.1346 0.0173 0.0000 9.440228 0.821251 2.140675 2.170845 70.96274 0.000000 2.2 Vietnam: Extended Earnings function of Male in Urban Dependent Variable: LNEARNING Method: Least Squares Date: 03/27/08 Time: 21:09 Sample: 578 included observations: 578 “ - Variable Coefficient Std Error t-Statistic Prob PRIMARY LOWERSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 C -0.270785 0.200857 0.480828 0.631480 0.809589 0.020285 -0.000567 9.009530 0.131018 0.124616 123967 0.200352 0.127838 0.013112 0.000216 0.219489 -2.066767 1.611801 3.878666 3.151850 6.332949 1.547082 -2.621412 41.04774 0.0392 0.1076 0.0001 0.0017 0.0000 0.1224 0.0090 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.264571 0.255539 0.708593 286.1989 -617.0122 1.730907 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 51 9.440228 0.821251 2.162672 2.223012 29.29395 0.000000 APPENDIX III 3.1 Vietnam: Earnings function of Male in rural Dependent Variable: LNEARNING Method: Least Squares Date: 03/26/08 Time: 22:13 Sample: 1251 Included observations: 1251 Variable Coefficient Std Error t-Statistic SCHOOLING EXPERIENCE EXPERIENCE2 C 0.043817 0.011431 -0.000403 8.397930 0.005679 0.008523 0.000134 0.142093 7.715123 1.341251 -3.010182 59.10161 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.111327 0.109189 0.674459 567.2536 -1280.389 1.718896 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) Prob 18 27 8.734860 0.714599 2.053380 2.069788 52.07207 0.000000 3.2 Vietnam: Extended earnings function of Male in Rural " - Dependent Variable: LNEARNING Method: Least Squares Date: 03/27/08 Time: 21: 31 Sample: 1251 Included observations: 1251 Variable Coefficient Std Error t-Statistic Prob PRIMARY LOWERSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 C 0.214294 0.160989 0.349046 0.979706 0.930932 0.015627 -0.000486 8.496688 0.059175 0.056102 0.066192 0.184287 0.118867 0.008527 0.000134 0.137804 3.621362 2.869577 5.273204 5.316206 7.831735 1.832657 -3.629648 61.65785 0.0003 0.0042 0.0000 0.0000 0.0000 0.0671 0.0003 0.0000 R-squared Adjusted R-squared S.E of regression 0.133022 0.128139 0.667246 Mean dependent var S.D dependent var Akaike info criterion Sum squared resid Log likelihood Durbin-Watson stat 553.4058 -1264.930 1.747026 Schwarz criterion F-statistic Prob(F-statistic) 52 8.734860 0.714599 2.035060 2.067876 27.24499 0.000000 APPENDIX IV 4.1 Vietnam: Earnings function of Female in Urban Dependent Variable: LNEARNING Method: Least Squares Date: 03/26/08 Time: 22:05 Sample: 225 Included observations: 225 Variable Coefficient Std Error t-Statistic Prob SCHOOLING EXPERIENCE EXPERIENCE2 C 0.083514 0.056364 -0.001181 7.771560 0.012034 0.017923 0.000284 0.323166 6.939672 3.144784 -4.165395 24.04818 0.0000 0.0019 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.375759 0.367285 0.618062 84.42226 -208.9809 1.558950 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 9.265962 0.777013 1.893163 1.953894 44.34327 0.000000 4.2 Vietnam: Extended Earnings function of Female in Urban Dependent Variable: LNEARNING Method: Least Squares Date: 03/27/08 Time: 21 :21 Sample(adjusted): 224 Included observations: 224 after adjusting endpoints Variable Coefficient Std Error t-Statistic Prob PRIMARY LOWERSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 C -0.070053 0.079796 0.572238 0.830205 0.947805 0.072140 -0.001446 8.046501 0.144061 0.135863 0.133678 0.174494 0.152528 0.018087 0.000282 0.308705 -0.486273 0.587326 4.280731 4.757788 6.213972 3.988540 -5.123621 26.06532 0.6273 0.5576 0.0000 0.0000 0.0000 0.0001 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression 0.408115 0.388934 0.608645 Mean dependent var S.D dependent var Akaike info criterion 9.264971 0.778611 1.879899 Sum squared resid Log likelihood Durbin-Watson stat 80.01704 -202.5487 1.683134 Schwarz criterion F-statistic Prob(F-statistic) 21.27657 0.000000 2.001744 APPENDIX V S.I Vietnam: Earnings function of Female in Rural Dependent Variable: LNEARNING Method: Least Squares Date: 03/26/08 Time: 22:20 Sample: 148 Included observations: 148 Variable Coefficient Std Error t-Statistic Prob SCHOOLING EXPERIENCE EXPERIENCE2 C 0.086925 0.00951 -0.000363 7.908546 0.017007 0.018641 0.000227 0.427607 5.111097 0.510219 -1.602735 18.49490 0.0000 0.6107 0.1112 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.420012 0.407929 0.723631 75.40434 -160.1012 1.929529 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 8.422750 0.940438 2.217584 2.298589 34.76032 0.000000 5.2 Vietnam: Extended earnings function of Female in Rural Dependent Variable: LNEARNING Method: Least Squares Date: 03/27/08 Time: 21:38 Sample: 148 Included observations: 148 Variable Coefficient Std Error t-Statistic Prob PRIMARY LOWERSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 C 0.326992 0.272675 0.684183 1.364494 1.256001 0.012659 -0.000447 8.167022 0.196986 0.200759 0.207170 0.290677 0.330633 0.018780 0.000230 0.406516 1.659978 1.358223 3.302523 4.694186 3.798779 0.674097 -1.943557 20.09028 0.0992 0.1766 0.0012 0.0000 0.0002 0.5014 0.0540 0.0000 R-squared Adjusted R-squared 0.436604 0.408434 Mean dependent var S.D dependent var 8.422750 0.940438 S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.723322 73.24723 -157.9534 1.977577 Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 2.242613 2.404625 15.49899 0.000000 54 APPENDIX VI 6.1 Vietnam: Earning function by Private sector Dependent Variable: LNEARNING Method: Least Squares Date: 05/24/08 Time: 15:05 Sample: 1278 Included observations: 1278 Variable Coefficient Std Error t-Statistic Prob SCHOOLING EXPERIENCE EXPERIENCE2 C 0.067785 0.008590 -0.000331 8.283919 0.006027 0.007700 0.000112 138602 11.24634 1.115570 -2.956161 59.76756 0.0000 0.2648 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.179590 0.177658 0.693900 613.4279 -1344.385 1.695084 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 0.0032 0.0000 8.721044 0.765193 2.110148 2.126276 92.96071 0.000000 6.2 Vietnam:Extended earnings function by Private sector Dependent Variable: LNEARNING Method: Least Squares Date: 09/28/08 Time: 21:39 " ” Sample: 1278 Included observations: 1278 Variable Coefficient Std Error t-Statistic Prob PRIMARY LOWSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 C 0.224174 0.277427 0.721666 1.508448 1.339097 0.012724 -0.000427 8.478423 0.055371 0.054898 0.071197 0.690537 0.157480 0.007674 0.000112 0.133744 4.048565 5.053502 10.13619 2.184457 8.503304 1.658037 -3.824838 63.39312 0.0001 0.0000 0.0000 0.0291 0.0000 0.0976 0.0001 0.0000 R-squared Adjusted R-squared S.E of regression 0.196155 0.191724 0.687940 Mean dependent var S.D dependent var Akaike info criterion 8.721044 0.765193 2.09601 Sum squared resid Log likelihood Durbin-Watson stat 601.0425 -1331.351 1.728298 Schwarz criterion F-statistic Prob(F-statistic) 2.128268 44.27225 0.000000 7.1 Vietnam: Earning function in Public Sector Dependent Variable: LNEARNING Method: Least Squares Date: 05/24/08 Time: 15:09 Sample: 924 Included observations: 924 Variable Coefficient Std Error t-Statistic Prob SCHOOLING EXPERIENCE EXPERIENCE2 C 0.090692 0.067003 -0.001383 7.501835 0.007736 0.011563 0.000202 0.190843 11.72392 5.794791 -6.836142 39.30901 0.0000 0.0000 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.227684 0.225166 0.733620 495.1428 -1022.873 1.506980 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 9.274541 0.833426 2.222669 2.243573 90.40763 0.000000 7.2 Vietnam: Extended earning function in Public Sector Dependent Variable: LNEARNING Method: Least Squares Date: 09/28/08 Time: 21:42 Sample: 924 Included observations: 924 Variable Coefficient Std Error t-Statistic Prob PRIMARY LOWSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 C -0.118095 -0.179457 0.037717 0.484587 0.641359 0.076464 -0.001605 8.366269 0.144815 0.127266 0.126128 0.150412 0.130780 0.011627 0.000203 0.196785 -0.815489 -1.410091 0.299041 3.221740 4.904125 6.576612 -7.913887 42.51469 0.4150 0.1589 0.7650 0.0013 0.0000 0.0000 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.239400 0.233588 0.729622 487.6314 -1015.811 1.554987 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 56 9.274541 0.833426 2.216041 2.257848 41.18760 0.000000 APPENDIX VII 8.1 Earnings function in Rural region Dependent Variable: LNEARNING Method: Least Squares Date: 05/24/08 Time: 15:28 Sample: 1399 Included observations: 1399 Variable Coefficient SCHOOLING EXPERIENCE EXPERIENCE2 C 0.050488 0.013649 -0.000463 8.314620 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.165952 0.164159 0.683430 651.5726 -1450.590 1.790476 Std Error t-Statistic Prob 0.005354 0.007233 0.000108 0.128706 9.430226 1.886973 -4.283184 64.60173 0.0000 0.0594 0.0000 0.0000 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 8.701842 0.747537 2.079471 2.094463 92.52219 0.000000 8.2 Vietnam: Extended Earnings function in rural region Dependent Variable: LNEARNING Method: Least Squares Date: 09/28/08 Time: 21:48 Sample: 1399 Included observations: 1399 Variable " Coefficient Std Error t-Statistic Prob PRIMARY 0.256919 0.205984 LOWERSECONDAR Y UPPERSECONDARY 0.400957 COLLEGE 1.042216 UNIVERSITY 0.980175 EXPERIENCE 0.017543 EXPERIENCE2 -0.000540 C 8.427940 0.056423 0.053580 4.553404 3.844460 0.0000 0.0001 0.062962 0.145486 111355 0.007232 0.000108 0.123713 6.368196 7.163703 8.802226 2.425889 -4.988101 68.12488 0.0000 0.0000 0.0000 0.0154 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.185989 0.181892 0.676142 635.9201 -1433.581 1.818009 57 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 8.701842 0.747537 2.060874 2.090858 45.40301 0.000000 9.1 Vietnam: Earnings function by urban region Dependent Variable: LNEARNING , ³ Method: Least Squares Date: 05/24/08 Time: 15:30 Sample: 803 Included observations: 803 Variable Coefficient Std Error t-Statistic Prob SCHOOLING EXPERIENCE EXPERIENC2 C 0.090350 0.029794 -0.000701 8.150828 0.006599 0.010518 0.000171 0.180532 13.69109 2.832768 -4.087108 45.14901 0.0000 0.0047 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.291544 0.288884 0.685079 374.9977 -833.6916 1.712663 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 9.391399 0.812402 2.086405 2.109759 109.6018 0.000000 9.1 Vietnam: Extended Earnings function by urban region Dependent Variable: LNEARNING Method: Least Squares Date: 09/28/08 Time: 21: 50 Sample: 803 Included observations: 803 Variable • - Coefficient Std Error t-Statistic Prob PRIMARY -0.200213 0.170799 LOWERSECONDAR Y UPPERSECONDARY 0.492177 COLLEGE 0.649807 UNIVERSITY 0.854331 EXPERIENCE 0.035116 EXPERIENCE2 -0.000836 C 8.753814 109563 0.102582 -1.827381 1.665004 0.0680 0.0963 0.101889 0.142198 0.106652 0.010761 0.000175 0.182298 4.830526 4.569741 8.010462 3.263124 -4.771655 48.01937 0.0000 0.0000 0.0000 0.0011 0.0000 0.0000 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.286471 0.280189 0.689255 377.6829 -836.5563 1.724210 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 58 9.391399 0.812402 2.103503 2.15021 45.59729 0.000000 REFERENCES Becker, G.S and Chiswick , B.R 1966, Education and the distribution ofearnings q (American Economic review, Papers and Proceedings) Dao Quang Vinh “ Labour market 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Sum Lam and Shirley Li, Estimation of the human capital earning function in Hong Kon 1981-1996, ECON 347 Hong Kong Economy Term Paper An Hodgson, 29 Jun 2007, www.euromonitor.com/Vietnams income distribution Vietnam Living Standard Survey VLSS 2004, 2002, 1997-98 VietNamNet, I 37027200d, Chi tieu cho giao due: Nhung so, giat minh,www.vietnamnet.vn/giaoduc/2006/02/5 40758/ VLSS 1992-93 60 World Bank, 1997, Vietnam: Education Financing, A World Bank country study Yuriy Gorodnichenko, Klara Sabirianova Peter, 2005, Returns to schooling in Russia and Ukraine, Journal of Comparative Economics 61 ... 17: Vietnams: Extended earnings liinctioii bJ Region The impacts of education on earnings In the case of Vietnam l ABSTRACT The labor market, earnings and the return to education have been strongly... attain the same earnings In the case of absence of direct information on investments in on -the- job training or on the years of labor market experience Mincer suggested that subtracting the age of. .. training, the rate of return from on -the- job training and the implications of on -the- job training for the distribution of earnings Here he noted explicitly that earning profiles imply a decline