Luận văn analysis of factors effecting labor incomes in hanoi

MINISTRY OF EDUCATION AND TRAINING IIA N O I N A T IO N A L E C O N O M IC S U N I V E R S I T Y ********** A n a l y s i s l a b o r o f i n f a c o m c t o r s e s i n e f f e c t i n H g a n o i A THESIS SUBM ITTED IN PARTIAL FULFILLM ENT OF THE REQUIREM ENTS FOR OBTAINING THE DEGREE OF MASTER OF ARTS IN ECONOMICS OF DEVELOPMENT A thesis presented by LE TAT PHUONG Supervisors: VU CUONG MA Hanoi - 2004 EDUCATION AND TRAINING H A N O I N A T IO N A L E C O N O M IC S U N I V E R S I T Y A n a ly s is la b o r o f f a c t o r s in c o m e s in e f f e c t in g H a n o i A T H E S IS S U B M IT T E D IN P A R T IA L F U L F IL L M E N T O F T H E R E Q U IR E M E N T S F O R O B T A IN IN G T H E D E G R E E OF MASTER OF ARTS IN ECONOMICS OF DEVELOPMENT fy fT A thesis presented by LE TAT PH UO NG đ i HỌC KTQD T R U N G rt$ M Ĩ t h ò n g TIN THƯ VIỆN Ị Supervisors: VU CUONG MA Hanoi - 2004 o A C K N O W LED G EM EN TS M y t h e s is , fr o m b e g in n in g to e n d , h a s r e c e iv e d a s s is ta n c e a n d su p p o rt fr o m m a n y p e o p le , to w h o m I w o u ld lik e to o f f e r m y s p e c ia l th a n k s M y fir s t th a n k s g o to a ll th e le c tu r e r s a n d a s s is ta n ts o f D e v e lo p m e n t E c o n o m ic D e p a r tm e n t fo r th e ir h e lp s in w r itin g th is t h e s is I a m d e e p ly g r a te fu l to m y s u p e r v is o r M A V u C u o n g , le c tu r e r at th e D e v e lo p m e n t E c o n o m ic D e p a r tm e n t, N a t io n a l E c o n o m ic s U n iv e r s it y fo r h is v a lu a b le in s tr u c tio n s , c o m m e n t s a n d s u g g e s t io n s d u r in g th e w r itin g p r o c e s s o f th is t h e s is I a m d e e p ly in d e b te d to m y fir s t s u p e r v is o r , P h D T n T h o D a t, M A D o K im H o a , M A N g u y e n T r o n g H a , le c tu r e r at th e N a t io n a l E c o n o m ic s U n iv e r s it y fo r th e ir h e lp s in p r o c e s s o f m y s tu d y in g I a m p a r tic u la r ly g r a te fu l to P r o f D r S c V u T h ie u w h o h a v e s tr o n g ly su p p o r te d m e d u r in g th e s tu d y p e r io d I a m g r a te fu l to m y fr ie n d s N g u y e n Q u o c T o a n , T r in h T h i P h u o n g , N g u y e n P h i H u n g , w h o s e in te lltu a l a n d sp ir itu a l a s s is ta n c e I a lw a y s tu rn to w h e n f a c in g a b lo c k in w r itin g th e th e s is I a ls o th a n k a ll o f m y c la s s m a t e s fo r th e ir w a r m fr ie n d s h ip a n d h e lp s d u r in g th e tim e w e w e r e s tu d y in g to g e th e r F in a lly , I w i s h to e x p r e s s m y d e e p th a n k s to m y p a r e n ts , m y d ea r r e la t iv e s , a n d m y g ir lfr ie n d fo r th e ir sp ir itu a l e n c o u r a g e m e n t a n d m a te r ia l su p p o rt W ith o u t t h o s e s o u r c e s , th e t h e s is w o u ld n o t h a v e b e e n c o m p le te d Le Tat Phuong September, 2004 L IS T O F A B B R E V IA T IO N S G SO G e n e r a l S ta tis tic s O f f ic e IM F In te r n a tio n a l M o n e y ta r y F u n d M O L IS A M in is tr y O f L a b o u r I n v a lid s a n d S o c ia l A ffa ir s MOF T h e M in is tr y o f F in a n c e OLS O r d in a r y L e a s t S q u a r e WB W o r ld B a n k V LSS V ie t n a m L iv i n g S ta n d a r d S u r v e y VND V ie t n a m c u r r e n c y u n it ( d o n g ) TA BLE OF CONTENTS A c k n o w l e d g e m e n t s L is t o f a b b r e v ia t io n s T a b le o f C o n t e n t s L is t o f t a b l e s L is t o f G r a p h s I n tr o d u c t io n R a t io n a le s o f th e s t u d y R e s e a r c h q u e s t i o n s .7 F o c u s a n d d a ta s o u r c e s o f th e s t u d y F o c u s o f s t u d y .8 D a ta s o u r c e s M e t h o d o l o g y S tr u c tu r e o f th e t h e s i s C h a p te r 1: T h e o r e t ic a l F r a m e w o r k 10 1.1 B a s is D e f i n i t i o n 10 S o u r c e o f i n c o m e 11 1.3 W a g e t h e o r ie s 11 T h e j u s t p r ic e w a g e 12 C la s s ic a l W a g e T h e o r i e s 13 3 P r o d u c tiv ity t h e o r i e s 15 B a r g a in in g T h e o r y o f W a g e s O th e r T h e o r i e s 2 1.4 I n c o m e a n d w a g e d e te r m in a n ts 1.5 L ite r a tu r e r e v i e w C h a p te r : D e s c r ip t iv e s ta tis tic a l a n a ly s is fa c to r s a f f e c t in g in c o m e in H a n o i 3 2.1 D e s c r ip t io n o f s a m p lin g a n d s u r v e y m e t h o d s 3 2.1.1 S a m p lin g fr a m e w o r k 3 2.1.2 S u r v e y q u e s t io n n a ir e 2 A n a l y s is fa c to r s a f f e c t in g in c o m e in H a n o i C h a p te r s u m m a r y C h a p te r :E c o n o m e tr ic d e c o m p o s it io n o f fa c to r s a f f e c t in g in c o m e in H a n o i 3 D e s c r ip t io n o f v a r ia b le s a n d o p tim u m r e g r e s s io n s 3 D e s c r ip t io n o f v a r i a b l e s 3 E x p la n a t io n fo r th e o p tim u m r e g r e s s io n f u n c t io n E s t im a t io n o f s e le c t e d m o d e l s .4 E s t im a t io n o f th e e c o n o m ic m o d e l o f w a g e d e t e r m in a n t a s 2 E s t im a t io n o f th e e c o n o m ic m o d e l o f in c o m e d e t e r m in a n t s 3.2.3 E s t im a t io n of th e e c o n o m ic m odel of in c o m e - w a g e gap d e t e r m in a n t s c h a p te r s u m m a r y 53 C h a p te r 4: C o n c lu s io n s a n d r e c o m m e n d a tio n s o n in c o m e p o l i c i e s .5 4 C o n c l u s i o n s 4 G o v e r m m e n t p o l i c i e s 4 M in im u m w a g e p o l i c y 4 I n c o m e p o l i c y 55 T h e s o c ia l s a f e t y n e t P o l i c y im p li c a t io n s 4 L im it a t io n s o f th e t h e s is a n d s u g g e s t io n s fo r fu rth er s t u d y R e f e r e n c e 61 A p p e n d i x L IS T O F T A B L E S T a b le :C o r r e la tio n c o e f f i c i e n t b e t w e e n s u b g r o u p s to o v e r a ll i n c o m e .3 T a b le : D e c o m p o s i t io n o f in c o m e b y th e e d u c a tio n a l l e v e l T a b le : D e c o m p o s it io n o f in c o m e b y s a v i n g T a b le 4: D e c o m p o s it io n o f in c o m e b y g e n d e r T a b le 5: D e c o m p o s it io n o f in c o m e b y a g e T a b le 6: D e c o m p o s it io n o f in c o m e b y s e c t o r 41 T a b le 7: lis t o f v a r i a b l e s T a b le 8: R e g r e s s io n m o d e l o f lo g a r ith m o f fa c to r s a f f e c t in g w a g e .4 T a b le 9: R e g r e s s io n m o d e l o f lo g a r ith m o f a g e fa c to r s a f f e c t in g w a g e in th e n o n - s t a t e s e c t o r T a b le 10: R e g r e s s io n m o d e l o f lo g a r ith m o f a g e fa c to r s a f f e c t in g w a g e in th e s ta te s e c t o r T a b le 11: R e g r e s s io n m o d e l o f lo g a r ith m o f fa c to r s a f f e c t in g i n c o m e T a b le 12: R e g r e s s io n m o d e l o f fa c to r s a f f e c t in g th e in c o m e - w a g e g a p T a b le 13: R e g r e s s io n m o d e l o f lo g a r ith m o f fa c to r s e f f e c t i n g o n in c o m e - w a g e g a p 53 L IS T O F G R A P H S G r a p h 1: M e t h o d s fo r s t u d y in g fa c to r s a f f e c t in c o m e ( b y a u t h o r ) G p h : M e a n o f in c o m e b y e d u c a tio n a l l e v e l G p h 3: I n c o m e b y a g e G p h 4: S tr u c tu r e o f in c o m e ( % ) 41 IN TR O D U C TIO N RATIONALES OF THE STUDY In p r o d u c tio n r e la tio n s h ip , d is tr ib u tio n p la y s a n im p o r ta n t r o le A lt h o u g h it is c o n t r o lle d b y p r o p e r ty r e la tio n s h ip , d is tr ib u tio n , i f s u ita b le , c a n s tim u la te b u s in e s s o p e r a tio n s a c t iv it ie s I n c o m e d e v e lo p m e n t a lly , o t h e r w is e , it can lim it b u s in e s s d ir e c tly in f lu e n c e s w o r k e r s ’ l i f e w h i le th e ir m in im u m li v in g sta n d a r d , b o th m a te r ia l a n d s p ir itu a l, m u s t b e s a t is f ie d W h e n th e ir in c o m e is lo w e r th a n th e ir b a s ic d e m a n d , w o r k e r s h a v e to in c r e a s e th e ir w o r k in g h o u r s to e a r n m o r e to m e e t th e m in im u m d e m a n d s In c a s e th e w o r k e r s are la id o f f , t h e y m u s t r e d u c e th e ir li v in g sta n d a r d s, e v e n h a v e th e ir c h ild r e n d ropped of sch ool o u t M any m ay becom e im p o v e r is h e d an d p r o b a b ly h a v e to d o il le g a l w o r k s , in c lu d in g s o c ia l e v i l s s u c h a s p r o s titu tio n , e v e n c r im e s e t c , t o su p p o r t th e ir fa m ilie s In co m e p o lic ie s sy ste m s, w h ic h on an im p rta n t fa c to r in s o c io - e c o n o m i c p o lit ic a l m a k e s d ir e c t e f f e c t s o n e m p lo y e e s a n d h a s d e e p in f lu e n c e s p r o d u c tio n , s e c t o r s , are grow n c o n s u m p t io n - a c c u m u la tio n and d e v e lo p m e n t r e la tio n s h ip , m o t iv a t io n s , la b o r c la s s e s , p r o d u c tiv ity an d e f f e c t i v e n e s s , s o c io - p o li t ic a l s ta b ility e tc A n d it is u n d e b a ta b le th a t in ord er to r e a c h th e ir s o c io - e c o n o m i c ta r g e ts , e v e r y g o v e r n m e n t h a s to c o n s id e r r e n e w in g a n d im p r o v in g th e ir in c o m e p o lic ie s In V ie t n a m , in c o m e p o l i c i e s are d e s ig n e d a n d im p le m e n te d b y th e S ta te A t h o u g h m a n y p r o g r e s s e s h a v e b e e n m a d e , th a n k s to th e r e n o v a tio n o f V ie t n a m in c o m e p o lic ie s by th e G o v e r n m e n t, th e r e are s t ill m any ir r a tio n a litie s n e e d e d b e a m e n d e d a n d c o n t in o u s ly r e n e w e d Since doi m oi or the renovation process started, economy of Ha Noi, the Vietnam’s capital with the population of about millions, has rapidly grown w it h le a d in g s e c t o r s a s in d u str y , c o n s tr u c tio n , tra d e a n d to u r is m , w h ic h h a s b e e n r e in fo r c e d w it h c o n c e n tr a tio n o f m o r e th a n h a l f o f n e w in v e s tm e n ts b y b o th g o v e r n m e n t a n d th e p r iv a te s e c to r T h e e c o n o m ic g r o w th h a s g o t an a v e r a g e in c r e a s e o f p e r c e n t p e r y e a r s in c e 9 In p a r tic u la r , c e r ta in k e y s e c to r s a s in d u str y a n d c o n s tr u c tio n h a v e g r o w n fa ste r , at a b o u t 17% p e r y e a r , a n d s e r v ic e , tr a d e a n d c o m m e r c e at a b o u t 13% H a n o ia n s ’in c o m e , a s th e r e s u lt o f th e s e a c h ie v e m e n t s , h a s b e e n s ig n if ic a n t ly o n th e r is e a n d is u s u a lly m u c h h ig h e r in c o m p a r is o n w it h th e n a tio n a l a v e r a g e in c o m e H o w e v e r , o n th e w a y t o im p r o v e th e in d e c e s , th e r e are s t ill m a n y d if ic u lt ie s to d e a l w ith s u c h a s th e d if f e r e n t l e v e l s o f w a g e /s a la r y in S ta te a n d p r iv a te s e c to r s , an d w id e n g a p b e e t w e e n in c o m e a n d w a g e /s a la r y , e s p e c ia l ly in S ta te s e c to r s T h is r e s u lts in a n e e d to fin d o u t w h a t fa c to r s a f f e c t w a g e a n d in c o m e to c o r r e c t w a g e a n d in c o m e p o l i c i e s T h e is s u e o n in c o m e h a s b e e n a p p r o a c h e d b y m a n y r e s e a r c h e r s an d le c tu r e r s w it h c e r ta in p u b lis h e d w e ll - k n o w n f in d in g s H o w e v e r , u p to n o w s tu d ie s s p e c ia l iz e d in th e fa c to r s a f f e c t in g in c o m e in H a n o i h a v e b e e n n o t a v a ia b le y e t B e c a u s e o f a ll a b o v e - m e n t io n e d r e a s o n s , I d e c id e to u s e th e to p ic “Analyses o f the factors affecting labor incomes in H anor a s m y fin a l t h e s is s tu d y RESEARCH QUESTIONS A s a lr e a d y m e n t io n e d , th e s tu d y f o c u s e s o n e x a m in in g th e fa c to r s h a v in g e f f e c t o n in c o m e in H a n o i, s o th e q u e s tio n s in m y r e s e a r c h are: > H o w is r e a l s itu a tio n o f H a n o i e m p l o y e e s ’ in c o m e ? > W h ic h fa c to r s d o h a v e e f f e c t o n in c o m e o f H a n o i e m p lo y e e s ? > What policies should be set up to improve Hanoi employees’ income? FOCUS AND DATA SOURCES OF THE STUDY 3.1 Focus of study The t h e s is sta rts w it h in tr o d u c tio n of th e o r e tic a l fr a m e w o r k fo r e x a m in in g in c o m e s in H a n o i, in w h ic h a n in d iv id u a l s u r v e y is c o n d u c t to p r o v id e e m p ir ic a l e v id e n c e fo r th e s u b je c t 3.2 Data sources T h e s tu d y u s e s b o th p r im a r y a n d s e c o n d a r y d a ta fr o m d iffe r e n t s o u r c e s The primary data: A s u r v e y o f 0 h o u s e h o ld s w a s c a r r ie d o u t in d e p e n d e n t ly b y th e a u th or in H a n o i u r b a n a r e a s , u s in g q u e s tio n a ir e s to c o l le c t p r im a r y d a ta fo r stu d y The secondary data: T o s u p p o r t th e s tu d y , I th o r o u g h ly a n d c a r e f u lly r e v i e w e d s e c o n d a r y d a ta s o u r c e s fr o m c o l le c t e d r e p o r ts a n d d o c u m e n t s , in c lu d in g o n e s fr o m G e n e r a l S ta tis tic O f f i c e ( G S O ) , th e M in is tr y o f F in a n c e ( M O F ) , M in is tr y O f L a b o u r I n v a lid s and S o c ia l A f f a ir s (M O L IS A ), th e W o r ld B ank (W B ), th e I n te r n a tio n a l M o n e y t a r y F u n d (I M F ), n e w s le t t e r s , n e w s p a p e r s a n d m a g a z in e s a n d o th e r s METHODOLOGY T h e r e are s e v e r a l m e th o d s fo r s tu d y in g in c o m e d e te r m in a n ts In th e s tu d y , t h e s e c a n b e d iv id e d a s g r a p h ic a n d a n a ly tic a l m e t h o d s ( s e e g p h 1), th e la tte r a g a in a s th e p o s it iv e a n d n o r m a tiv e a n a ly s e s A n d In th e p o s it iv e a n a ly s is , th e c o m p a r a tiv e , s ta tis tic a l a n d e c o n o m e t r ic m e t h o d s are u s e d CHAPTER CONCLUSIONS AND RECOMMENDATIONS ON INCOME POLICIES 4.1 CONCLUSIONS From the issues analysed above, there are som e findings w hich could be em phasized is the follow ing paragraphs F ir s tly , Incom es o f H anoi’s em ployees depend significantly on certain factors as education, saving, gender and age S e c o n d ly , T hough incom es o f H anoi em ployees not depend on w hether they w ork in the state or non-state sector, their salaries or w ages T h ir d ly , G ender factor has strong effect on H anoi em ployees’ incom e but it does not influence their wage F u r th e r m o r e Education is one o f key factors to boost incom e The more education o r skill em ployees can get, the higher productivity they can gain, thus helps them to earn m ore L a s tly , It is large gap betw een incom e and w age, especially in the state sector It m eans em ployees in the state have other source o f incom e besides w ages/salaries 4.2 GOVERMMENT POLICIES 4.1.1 Minimum wage policy M inim um w age is applied to w orkers w ho the sim plest w ork in norm al w orking conditions The m inim um w age rate is intended to allow such w orkers both to m eet his basic needs and to his savings for accum ulation 54 o f hum an or physical capital It is based on (and therefore periodically adjusted for changes in) the cost o f living A t the tim e o f the study, m inim um wage rate is around 290.000 V N D per m onth1 The m inim um w age rate is different for jo in t venture and 100-per-cent foreign-ow ned enterprises, based on som e perception o f w hat V ietnam could reasonably charge given the wage rates in other countries com peting for foreign investm ent This wage rate is considerably higher than the m inim um w age rate for dom estic labourers It is set at USD45 per m onth in Hanoi and H C M city; U SD 40 in other specific cities, and USD35 in the rest o f the country2 (in com parison w ith USD 10 per m onth for dom estic labour) 4.1.2 Income policy U nder the centrally-planned econom y, w age and em ploym ent levels in state-ow ned enterprises w ere centrally controlled w ith the aim o f capturing profits for the state budget In the business reform process, these enterprises w ere given considerable autonom y In 1993, the G overnm ent passed tw o resolutions aim ed at putting “the payroll and w age fund under strict state m anagem ent (R esolution 25/CP and 26/C P dated 23th M arch 1993) These resolutions specified the exact “basic salaries” to be paid to all state-sector em ployees The basic salary calculation w as based on a m ultiple o f the m inim um w age rate Sim ultaneously, all non­ m onetary and non-w age incom es w ere abolished, including com pensation for higher electricity prices, paym ents for education and training, transport, annual holiday; bonus paym ents was allow ed up to six m onths (or 50 per cent o f the annual basic w age) Decree 03/2003/NĐ - CP dated 15th Jan 2003 M OLISA, Circular No 11/LD TB X H -T T, May 3rd, 1995 55 The basic w age is calculated based on 72 different w age tables, each o f w hich presented a m atrix o f different salaries based on skill levels and grades (typically reflecting years o f experience and form al education) Salaries are counted as m ultiples o f the m inim um w age, set at V N D 120.000 per m onth O f the 72 w ages tables, 21 are for the “direct production sector” and 24 are for the “trade and service sector” The incom e policy applies m ainly to state institutions, including stateow ned com m ercial enterprises H ow ever, the A rticle 57 in the Labour Code does not specifically regulate the application o f the incom e policy to ju st the state sector The A rticle o f the D ecree 197 (dated 31st, Dec 1994) also states that: “The M O LISA , based on the state’s salary policy shall m ake guidances on the im plem entation o f the salary regim e in enterprises and production business or service organizations belonging to the other sectors o f the econom y” The control m easures on non-state salaries are to ensure that w ork and m anagem ent costs are not inflated to reduce reported profits The direct linkage betw een the m inim um w age rate and income throughout the state sector m eans that adjustm ents o f m inim um wage rates give im portant im plications for governm ent finance A ny adjustm ent in the m inim um w age rate im plies a general increase in all incom es and paym ents linked to the m inim um wage 4.1.3 The social safety net As m inim um w age and incom e policies set out and partly cause lower public w ages, the social safety net helps to explain partly w hy alm ost all public w orkers prefer staying w ith their current jo b s to seeking better-paid ones from the non-state sector It is clear that health care, retirem ent, housing, childcare, education and other public benefits are traditionally linked to the state sector 56 The social insurance system ensures pensions for public w orkers when they retire, and also m any benefits are provided for childbirth, sickness, disabilities related to w ork, accidents or sectoral diseases It is funded by the obligatory paym ent o f prem ium by the em ployers (15 percent o f the wage fund) and the em ployees (five percent o f the w age), applied in all enterprises w ith ten or m ore em ployees The social insurance allow ances are included in the salary paid by the labour users so that w orkers can enjoy a social insurance schem e taken by their ow n choice or look after their own insurance In practice, the system covers m ost (but not all) state-ow ned enterprises and takes effect in som e non-state enterprises 4.3 POLICY IMPLICATIONS A ccording to the above analyses, it is obviously to see that incom e is under effect o f m any factors The thesis ju st confines to the research o f the influences o f the state and non-atate sectors on w age and incom e, then giving certain recom m endations on wage and incom e policies A nalyses show that w ages in the state sector are in general lower than that is the non-state sector, but there is alm ost no difference in incomes betw een the tw o sectors Besides, there is certain relashionship betw een wage and w ork in the state sector as analysed before B ased on these findings, in order to have possitive im pacts on H anoian em ployees’ incom e as w ell as reduce differences in incom es and w ages betw een the state and non-state sectors, especially in the state sector itseft, the follow ing recom m endations should be taken into account: - Increase w age rates in the state sector: it is a fact that partim e jobs, w hich can lead to low productivity for full-tim e jobs, are attributed to low w ages Thus, w age increase in the state sector, w hich can help ensure efficient w orking-tim e, should be strongly considered to raise efficiency o f the sector 57 W ages should be used as a lever to efficiently stim ulate prodution and perform ance in the state sector It m ust reflect that the higher rate o f wage it is, the bigger new value it is created - The above com parisons are based on rem uneration only A lthough the w age m easure includes m onetary values o f benefits as travel allow ances, job training and food received at w ork etc., the values o f other fringe-benefits, such as paid holidays or pensions, are not m entioned A s it is w ell know n that such benefits are usually m ore prevalent in the state than in the non-state sector I f the state w ages are “too low ” indeed, w hy m ost civil servants not quit their jo b s? T here are several reasons One is that full-tim e jo b s in the non-state sector are not available A nother explanation is m any are unw illing to forgo direct m onetary rew ards from jo b security and other intangible interests for jo b characteristics and fringe-benefits such as paid holidays, sick paid, pension etc This view is consistent w ith the show n data on non-w age benefits in public and private sector jobs The m ost plausible explanation is that governm ent w orkers can have double-benefits: w hile they enjoy the security and other benefits stem ing from w orking for the G overnm ent, they also can supplem ent their incom e by taking a second jo b A s have been show n, the probability o f finding a civil servant w ho has a second jo b depends significantly on the wage in the state sector Further erosion o f state sector w ages can result in m ore “double jo b b in g ” by civil servants - The consequences o f having underpaid governm ent w orkers to internal efficiency o f the G overnm ent and the concom itant effects on the econom y as a w hole are strongly serious The Industrialization and M odernization process that V ietnam are pursuing needs m ore educated and highly m otivated civil 58 servants to prom ote productivity and provide advices to policy m akers in the building and im plem entation o f policies, that be nearly im possible to see in a w ork force th at is badly underpaid The social safety net that gains favor from public w orkers and encourage them not to m ove to the private sector, should be revised and changed to deal w ith labour m arket segm entation Finally, the state sector should learn the lesson on efficiency o f operation from the non-state sector, such as paym ent for labour 4.4 LIMITATIONS OF THE THESIS AND SUGGESTIONS FOR FURTHER STUDY Limitations of the thesis F ir s t o f a ll, the supporting survey has been taken w ith ju st 200 cases in the area o f H anoi urban districts due to lim ited tim e and capability S e c o n d ly , T here are m any factors having effects on incom e such as the econom ic grow th, unem ploym ent, inflation, variables on geography, education, age, gender etc H ow ever, the thesis ju st confines to certain variables It needs m ore tim e and efforts to intensify the research T h ir d ly , T hough the study is fulfiled scientifically w ith great efforts, there are still m any shortcom ings The author assum e that the inform ation on incom e is accurate, but this is strong assum ption It is know n that incom e is underreported, so that, in the survey process, the author has tried to question carefully in order to get the best results 59 Suggestion for further study The thesis refers to the factors that m ay affect H anoi em ployees’ income H ow ever, one can go further by questioning: H ow is incom e diferential in Hanoi? The answ er to this question has not been solved by the thesis and needs further study 60 REFERENCE The Comprehensive Poverty Reduction And Growth Strategy (CPRGS) (M ay,2002), H anoi, V ietnam G erald M M eier (1995) Leading issues in economic development, Stanford U niversity, O xford U niversity Press C harles B rennan (1959), Wage Administration (H om ew ood, III.: Richard D Irw in, Inc.,) H erbert G Z ollitsch & A dolph Langsner (1976) Wage and salary administration , South-W esterm Publishing Copany GSO (2000) Khao Sat Muc Song Dan Cu Vietnam (Vietnam Living Standard Surveys): 1997 - 98, Statistical Publishing H ouse, Hanoi John Luke G allup (Sep, 2002) The Wage Labor Market and Inequality in Vietnam in the 1990s, W orld B ank Policy R esearch W orking Paper 2896 R obert S.Pindyck & Daniel L.R ubinfeld (1977) Econometric Models and Economic Forecasts, 4th edition, M e G raw Hill Gujarati, D.N (1995) Basic Econometrics, 3rd edition, M e G raw Hill StataC orp (1999), St at a Statistical Software: Release 7.0 10 R T odd Jew ell, Michael A M cPherson, D avid J M olina (2001) Testing the Determinants o f Income Distribution: An Application o f Professional Sports, Data, U niversity o f N orth Texas, D epartm ent o f E conom ics 11 A m y Y c L iu (2004) Sectoral gender wage gap in Vietnam, Australian N ational U niversity 61 12 U N D P & G SO (2001) Living Standards During an Economic Bom, The case o f Vietnam, Statiscal Publishing House 13 D ang C ong san V ietnam (1991, 1996, 2001), Van kien dai hoi dai bieu toan quoc lan thu VII, VIII, IX, N X B C hinh tri Q uoc Gia 14 E W ayne N afziger (1998), The economics o f developing countries, Statiscal Publishing House 15 Joseph E Stiglitz (1990), Economics o f the public sector, Second Edition, W w N orton & com pany 16 G SO (2003), N ien giam thong ke 17 M ichael P.T odaro (1989), Economic development in the third world, 4th edition, Longm an, N ew York 18 W B (2002), World Development Indicators 19 D ollar, D avid, Paul Glew w e and Jennie L itvack (1998), Household Welfare and Vietnam’s Transition to a Market Economy, W orld Bank, W ashington DC 20 K ane, Thom as, C ecilia R ouse and D ouglas Staiger (1999), Estimating Returns to Schooling when Schooling is Misreported, Princeton Industrial R elation Section W orking Paper 419, Princeton University 21 D ougherty, C hristopher R s specification o f and E m m anuel Jim enez (1991), The earnings: Test and implication, Econom ics o f E ducation R eview 22 Polachek, Solom on w and W Stanley Siebert (1993), The economics o f Earnings, C am bridge University Press, C am bridge 62 APPENDIX A ppendix 1: Decomposition variables Education Primary diploma Lower secondary diploma Upper secondary diploma College University Master and over Saving Yes No Gender Male Fenale Age Under 20 20-29 30-39 40-49 50-59 over 60 Sector State Non-state 63 Appendix reg lnincome lnyearedu saving gender age age2 child sector thanxuan caugiay haibatrung bading dongda hoankiem maried single divorse Source Model Residual Total ss df 46.1518772 40.9198279 87.071705 16 199 lnincome lnyeardu saving gender age age2 child sector thanhxuan caugiay haibatrung badinh dongda hoankiem maried single divorse cons Coef 1.698832 0.2434267 0.2139487 0.0693017 -0.0007271 -0.1382232 -0.0413823 0.0338202 -0.1937341 -0.0313134 0.0028727 -0.0097106 -0.0080412 0.3036941 0.0682932 0.9233114 1.339968 Std Err 0.1715506 0.0974878 0.0729773 0.0222696 0.0002752 0.0627147 0.0740968 0.1357727 0.1267727 0.1299624 0.1343421 0.1323519 0.1316401 0.1752794 0.2197784 0.2993353 0.6240035 183 MS 2.88449232 0.223605617 0.437546257 t 9.90 2.50 2.93 3.11 -2.64 -2.20 -0.56 0.25 -1.53 -0.24 0.02 -0.07 -0.06 1.73 0.31 3.08 2.15 p>|t| 0.000 0.013 0.004 0.002 0.009 0.029 0.577 0.804 0.128 0.810 0.983 0.942 0.951 0.085 0.756 0.002 0.033 Number o f obs F( 16, 183) Prob > F R-squared Adj R-squared Root MSE [95% Conf 1.360361 0.0510821 0.0699635 0.0253635 -0.0012701 -0.26196 -0.1875761 -0.234061 -0.4438582 -0.2877307 -0.2621859 -0.2708425 -0.2677688 -0.0421342 -0.3327193 0.3327193 0.1088015 = = = = = 200 12.90 0.0000 0.5300 0.4890 0.47287 Interval! 2.037304 0.4357714 0.3579339 0.11324 -0.0001841 -0.0144863 0.1048115 0.3017014 0.05639 0.2251039 0.2679313 0.2514213 0.2516863 0.6495225 0.5019187 1.513903 2.571134 Appendix reg lnincome lnyearedu saving gender age age2 Source Model Residual Total ss 41.7744976 45.2972074 87.071705 df 194 199 lnincome lnyeardu saving gender age age2 cons Coef 1.572668 0.2831447 0.2131995 0.0690546 -0.0007678 1.728272 Std Err 0.1613673 0.0967281 0.0707244 0.0200357 0.000255 0.5667056 MS 8.35489953 0.23349076 0.437546257 t 9.75 2.93 3.01 3.45 -3.01 3.05 P>1 0.000 0.004 0.003 0.001 0.003 0.003 Number o f obs F ( 16, 183) Prob > F R-squared Adj R-squared Root MSE [95% Conf 1.254409 0.092371 0073712 0.0295388 -0.0012707 0.6105773 = 200 = 35.78 = 0.0000 = 0.4798 = 0.4664 = 0.48321 Interval! 1.890928 0.4739184 0.3526869 0.1085705 -0.0002649 2.845968 64 Appendix reg ln w a g e ln y e a r e d u s a v in g g e n d e r a g e a g e c h ild s e c to r th a n x u a n c a u g ia y h a ib a tr u n g h a d in g d o n g d a h o a n k ie m m a r ie d s in g le d iv o r s e S o u rc e ss df MS N um ber o f obs = 200 FC , ) P ro b > F R -sq u a re d A d j R - s q u a re d = = 0 0 = = 04101 03586 Root M SE = M odel R e s id u a l 7 16 183 7 4 2 2 T o ta l 68 7645071 199 5 7 ln w a g e ln y e a rd u s a v in g C o e f 1 5 2 9 S td E rr p > |t| t f9 % C o n f In te rv a l! 7 9 0 0 8 0 9 0 0 8 1 - 0 5 gender 01147966 0 6 58 age 0 0 2 0 0 8 age2 - 0 0 7 0 0 -2 0 - 0 -0 0 - 7 c h ild - 0 -2 0 -0 8 s e c to r th a n h x u a n - 0222271 0 7 01351763 - 0 0 - 8 - 4 7 -0 8 c a u g ia y - 5 7 -1 - 4 0 4 9 - 5 h a ib a tr u n g - 0 9 -0 b a d in h 0 8 3 9 0 -0 0 02807806 2 3 dongda 0 8 7 0 h o a n k ie m -0 7 -0 8 m a r ie d - 01310618 -0 5 -0 9 -0 - 8 9 02077282 00156997 02218789 s in g le - 02188129 -1 0 8477412 d iv o r s e 4 3 2 - 4 6 7 3 5.61 0 0 2 2 1 cons 6212621 Appendix R eg ln w a g e ln y e a r e d u s a v in g s e c to r a g e a g e S o u rc e ss MS df N um ber o f obs = = 200 M odel 9 5 9 1 F ( 16, R e s id u a l 3 5 2 6 7 P ro b > F R -sq u a re d = T o ta l 194 199 2 0 0 = 6 A dj R -sq u a re d = = 345550287 183) Root M SE ln w a g e C o ef S td E rr t p > t| T95% C o n f In te rv a l] 2 5 ln y e a r d u 9 0 0 s a v in g 00951601 0 0 0 2 6 - 6 9 - s e c to r age - 8 0 -7 5 0 0 0 00195392 0 00230425 1001156 -0 0 4 8 2 age2 - 0 0 00002495 - 9 0 - 0 cons 5 9 0 0 9 65 Appendix reg ln in w a g a p ln y e a r e d u s a v in g g e n d e r a g e a g e c h ild s e c to r th a n x u a n c a u g ia y h a ib a t r u n g h a d in g d o n g d a h o a n k ie m m a r ie d s in g le d iv o r s e ss df MS M odel R e s id u a l 5 9 16 146 9 6 8 T o ta l 8 162 9 0 S o u rc e ln in w a g a p C o e f S td E t = 163 P ro b > F R -sq u a re d = = 0 0 0 A dj R -sq u a re d = Root M SE = N um ber o f obs P>Ịt| F ( 16, 183) [9 % C o n f In te rv a l! ln y e a r d u 5 01 0 0 9 s a v in g - 0 1 9 - - 7 gender 1 1 4 0 1 0 9 5 0 age 0 1 0 1.53 - 0 6 8 age2 - 0 0 3 0 0 3 -0 - 0 5 0 0 c h ild 0 6 2 7 4 - 2 s e c to r 8 1 6 0 0 1 0 1 th a n h x u a n - 3 2 6 -0 -0 9 9 c a u g ia y - 9 9 -0 - 3 9 h a ib a tr u n g 0 2 4 -0 - 4 4 2 b a d in h - 9 8 -0 - 3 6 8 dongda 0 8 -0 6 - 7 3 h o a n k ie m 0 9 6 - 3 7 m a r ie d 3 5 1.91 0 - 0 9 s in g le 7 9 4 7 0 - 0 2 6 d iv o r s e 6 9 3 0 7 cons - 2 6 2 9 -1 0 -4 8 9 Appendix r e g ln in w a g a p l n y e a r e d u s e c to r g e n d e r S o u rc e ss df MS M odel 5 3 4 R e s id u a l 1 1 59 T o ta l 8 62 9 0 ln in w a g a p C o e f S td E rr t = = P ro b > F = 0 0 N um ber o f obs p>t F ( 16, 183) 163 R -sq u a re d = 0 A d j R -s q u a re d = Root M SE = 7 [9 % C o n f In te rv a l] ln y e a r d u 2 7 0 0 2 8 s e c to r 8 6.61 0 0 8 7 8 gender 4 4 1 8 5 0 0 9 cons 1 - 9 4 66 A ppendix R eg in w a g a p y e a re d u s a v in g g e n d e r a g e a g e c h ild s e c to r th a n x u a n c a u g ia y h a ib a t r u n g h a d in g d o n g d a h o a n k ie m m a r ie d s in g le d iv o r s e ss df MS M odel 163862042 7 6 4 9 R e s id u a l 194170945 16 183 T o ta l 358032988 199 C o ef S td E y e a rd u 8 s a v in g gender 4 4 2 in w a g a p 8 200 N um ber o f obs S o u rc e = P ro b > F R -sq u a re d = 0 0 = 7 A dj R -sq u a re d = Root M SE = 1030.1 F ( 16, 183) p > |t| 195% C o n f In te rv a l] 0 0 9 3 8 61 - 1 3 t 0 7 51 -0 0 8 8 -2 2 2 8 age 8 5 age2 7 9 9 c h ild 6 -8 s e c to r 7 3 5 0 0 7 9 th a n h x u a n - 9 6 -0 5 -7 4 c a u g ia y - -0 5 -7 3 8 h a ib a tr u n g - 4 8 -0 4 -8 7 2 2 b a d in h - 2 -7 9 6 3 5 - 9 1 8 -0 dongda -0 -7 6 - 4 9 h o a n k ie m 7 0 m a r ie d 1 8 9 0 7 s in g le 4 7 0 2 d iv o r s e 7 9 3 0 2 9 cons - -4 0 0 -6 -2 4 Appendix r e g in w a g a p y e a r e d u s e c to r g e n d e r S o u rc e ss df MS N um ber o f obs = 200 F ( 16, = 33 P ro b > F R -sq u a re d = 0 0 M odel 120650886 9 R e s id u a l 237382102 196 1 3 T o ta l 358032988 199 9 183) A dj R -sq u a re d R oot M SE in w a g a p C o ef S td E rr y e a rd u 6 2 s e c to r 1 = 3 = = 1 0 P>1 [9 % C o n f In te rv a l] 0 0 0 0 6 1 t 7 gender 5 9 8 0 9 cons - 2 7 - 5 0 0 - -1 3 67 P h ụ lụ c 10 re g In w a g e a g e a g e ( in th e n o n - s ta te s e c to r) S o u rc e M odel R e s id u a l T o ta l In w a g e A ge A ge2 _cons ss 5 5 4 C o e f 8 - 0 0 0 df 98 100 S td E rr 0 0 0 8 5 MS 4 6 9 8 5 4 t p> ltl - 6 0 0 0 0 N um ber o f obs F ( 16, ) P ro b > F R -sq u a re d A d j R -s q u a re d R oot M SE = 101 = 7 = 0 0 = = 1 = [9 % C o n f In te rv a l] 0 -0 0 3 2 - 0 0 6 Phụ lục 11 re g ln w a g e a g e a g e ( in th e s ta te s e c to r) S o u rc e ss df MS M odel R e s id u a l 6 3 2 96 6 8 0 T o ta l 7 3 98 0 9 In w a g e A ge A ge2 _cons C o e f S td E rr t p> ltl 0 - 0 0 6 1 0 8 0 0 8 - 6 8 0 0 0 N um ber o f obs F ( 16, ) P ro b > F R -sq u a re d A d j R - s q u a re d R oot M SE = 99 = = 0 = 6 = 0 8 = [9 % C o n f In te rv a l] 0 4 - 0 0 6 5 0 0 0 8 68