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MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY -*** - PHAM THI LY Ho Chi Minh Labor Market in International Integration Specialization: Political Economy Code: 62310102 Supervisor: Doctor Luu Thị Kim Hoa Associate Professor Nguyen Chi Hai DOCTORAL THESIS SUMMARY HO CHI MINH CITY, FEBRUARY, 2018 FORWORD Reasons for selecting the topic Vietnam is intergrating into the world economy, the development of labor market is considered as an important element to enhance the competitiveness of the economy in the global playground On the other hand, the process of international integration also brings opportunities and challenges for Vietnam labor market Therefore, how has Vietnam labor market developed in the context of integration and what policies need to promote the development of the labor market in order to improve competitiveness, promote economic growth and ensure sustainable employment? In order to answer these question, we chose to study the topic of "Ho Chi Minh Labor Market in International Integration" We chose to study the labor market in Ho Chi Minh City because this is the pioneering local about labor market relation, and this is the place where concentrate the largest labor supply Objectives and tasks of research 2.1 Objectives of research The general objective of the thesis is to provide scientific and practical arguments for the movement and development of the labor market; and propose the views, orientations and policies for development of the labor market in HCMC in the context of international integration 2.2 Taks of research The research tasks of the dissertation are research papers with the same topic and systematize theories on labor market, determining the research gap, forming the methodological background and analytical framework for the topic; analyze the reality and identify the factors affect the results of HCMC labor market in the process of international integration in recent years; evaluating the achievements and limitations of HCMC labor market; forecasting the opportunities and challenges of the HCMC labor marke in the process of integration, thence forming views, proposing orientations and systematic policy solutions to develop HCMC labor market Object and scope of research 3.1 Object of research The object of the thesis is "Labor market” 3.2 Scope of research The thesis studies the labor market in the context of international integration in terms of political economy, within HCMC since 1995, especially since 2007 when Vietnam became a member of WTO New contribution of the dissertation Firstly, theoretical contributions: The thesis applies the theory of labor market of Marxist political economy and modern political economy in order to analyze the impact of internal factors and international integration factors on results of the labor market; Secondly, practical contributions: The thesis shows the main outcomes of the labor market and analyzes the internal factors of the economy and international integration affecting these key results; to determine the achievements and limitations of HCMC labor market; to forecast the opportunities and challenges of the HCMC labor marke in the process of integration; to propose solutions for the development of HCMC labor market based on scientific and practical background Structure of the dissertation The dissertation includes: Introduction, chapters, Conclusions, Reference List and Appendix Chapter OVERVIEW OF RESEARCH 1.1 Overview of research on labor market in abroad In this section, this dessertation summarizes a number of researches on labor market in transition economies, such as China, Eastern Europe And the thesis also summarizes some studies on labor markets in developing countries in the context of globalization 1.2 Overview of research on labor market in Vietnam In this section, the dissertation focuses on a number of studies on labor market in Vietnam and HCMC in the context of international integration 1.3 Overall assessment of the relevant research In analyzing labor market, both domestic and foreign researches refer to three basic factors of the labor market: labor supply, labor demand and wages Labor market, on the one hand, operating according to the objective laws of the market, on the other hand, it needs the regulation and management of the State The nature of the labor market may have different perspectives, but both economic theory and empirical research highlight the role of labor markets and labor market policies in the economy Labor market development policies aim to effectively utilize human resources to promote economic growth, enhance the competitiveness of the economy, ensure full employment, sustainability and high productivity in the integration process Most researches have different approaches and conclusions, but all agree that labor markets are one of the main channels affected by integration, the context of regionalization and globalization The degree of impact of the integration process on the labor market in different countries is different because it is unique In order to develop the labor market, there should be coordination of policies at the national and regional level Labor market studies in Vietnam have also shown achievements and constraints, suggesting that the integration process has both positive and negative impacts on the labor market However, the research gap is still very broad and needs to be further researched: the labor market studies in the country not specify in detail what factors affect the movement and distribution development of the labor market; The studies on labor market in limited scope, smaller areas are very few, especially the study of labor market by region and territory of the country; Some researches on labor market in Ho Chi Minh City have not studied comprehensive labor market in HCMC in the context of international integration In addition, most of the major studies focus on just one aspect of the labor market, such as labor market research in the context of micro-level economic transition (enterprise), or study the impact of policies on the development of the labor market At the same time, most studies on labor markets in Vietnam or within HCMC were conducted in the period before 2007, when Vietnam was not fully integrated into the world economy As a result, the analysis and policy implications may no longer be relevant to the current context Chapter THEORETICAL BACKGROUND OF LABOR MARKET IN INTERNATIONAL INTERGRATION 2.1 The basic theoretical issues on labor market 2.1.1 The concept of labor market The concept of labor market can be interpreted in the following ways: Firstly, in terms of space: the labor market is an interactive space between buyers and sellers of labor to agree on wages, working conditions, working time, etc Secondly, in terms of essence: the labor market is a category of production relations, expressing the relationship between workers and employers in the process of producing, distributing, exchanging and consuming labor power Thirdly, in terms of operating mechanism: the labor market is part of the synchronous system of markets, so it is influenced by the objective laws in the market economy and the regulation of the State 2.1.2 Theory of labor goods of Marx In this section, the thesis focuses on Marx's theory of labor goods, including: the concept of labor, the condition of labor becoming goods, the two attributes of labor goods is the value and use value This section also analyzes Marx's theory of wages, distinguishing between nominal wages and real wages 2.1.3 The rules of operation of the labor market Like any other market, the labor market operates under the objective laws of the market, in which value is considered the basic economic rule In addition, the impact of supply-demand law and competition law has led to the results of the labor market, including wages, employment and unemployment 2.1.4 Theory of employment and unemployment In this section, the thesis systematically summarizes some of the typical theories of employment and unemployment, including the theory of employment and unemployment in some political economics schools such as Marx, Classical and New Classics and J.M Keynes theory 2.2 Labor market in international integration 2.2.1 Impact of the internal factors inside the economy on the labor market The development of the labor market is influenced by many factors in the economy In our opinion, there are a number of key factors: demography, growth and economic structural change, education and training, institutions and policies of the State, the system of labor market services 2.2.2 Impact of international integration on the labor market The labor market is not only influenced by factors inside the economy but also influenced by the factors of international integration Trade liberalization and foreign direct investment actually affect the results of the labor market However, this impact on wages and employment is the difference between the subjects in terms of skill level, industry, business sector 2.2.3 The role of labor market in economic growth and international integration The labor market can facilitate or limit the growth of the economy as this is the input market for the production process This is an important market in synchronous systems of market types of market economy In addition, the results of the labor market such as quantity and quality of labor supply, labor price, etc also directly affect the import and export of goods, foreign direct investment and the competitiveness of the economy in the increasingly international competitive environment Therefore, the development of labor market plays the role of ensuring full and sustainable employment for workers; promote economic growth and improve the competitiveness of the economy in the context of international integration and fair distribution, ensuring social security for workers 2.3 Suggested analytical framework for the dissertation Labor market: Impact of the internal factors inside the economy on the labor market - Demography Growth and economic structural change Education and training Institutions and policies of the State The system of labor Policies Policy on labor demand The policy of economic structural change associated with transformation of economic growth model - The policy of enterprise development - Policy for the informal sector -Export promotion policy market services Labor market - Supply and demand of labor Competition on labor market Employment and unemployment Wages International integration Trade - Investment - Labor movement - Policy on labor supply -Improving the quality of human resources -Improving the efficiency of labor supply management Policy on labor market: -Legal framework of the labor market -Wage policy -Policy linking supply and demand of labor Chapter - Target -Effective allocation of human resources -Improving the competitivene ss of the economy -Equitable distribution and risk mitigation in the labor market RESEARCH METHODS 3.1 Research approach The research subject of the dissertation belongs to political economics, therefore, the author uses the " Materialistic Dialectical Method" and the "Scientific Abstraction Method" as the main method of study The basic principles or requirements of the method are described in detail in this part of the thesis 3.2 Specific research methods To conduct research, the thesis uses a combination of qualitative and quantitative methods 3.2.1 Qualitative research methods The thesis uses qualitative methods: historical overview method, event study method, comparative method and analytical and synthesis method 3.2.2 Quantitative research methods Descriptive statistics are used to collect, describe and analyze data on the economic structure, supply and demand for labor, wages, employment and unemployment on the labor market in Ho Chi Minh City The statistical test (t-test and ANOVA) is used to evaluate and compare the variables of labor and income of employees who work in firms with and without import-export activities, FDI enterprises and other business areas i is statistically significant Export-import enterprises not only have a larger labor size than non-import-export enterprises but also have higher capital-intensive levels Comparing the average capital per employee of the import-export enterprises is higher than that of the other enterprises The wages of workers in export enterprises are generally higher than the wages of employees working in non-export enterprises 4.5 A general assessment of the achievements and limitations of the HCMC labor market in international integration 4.5.1 Achievements and causes The results of analyzing the real situation of HCMC labor market in the process of international integration show that the labor market in Ho Chi Minh City has achieved the following achievements: Firstly, the labor supply of the City is large Compared to the general level of the country, the quality of labor has been constantly improved This is one of the advantages that help Ho Chi Minh City become attractive destinations of domestic and foreign investors Secondly, the structure of labor demand shifts positively Due to the demand of economic restructuring from simple labor-intensive industries to capital-intensive industries, demand for skilled labor is increasing Thirdly, the unemployment rate and underemployment rate tend to decrease 18 The incidence of wage labor in HCMC has been increasing, and this is the region with the highest rate, indicating the development of labor market in the city Fourthly, wages are determined on the basis of the value of labor and the fluctuation of labor supply and demand in the market Average wages tend to increase in line with economic growth and labor productivity growth Fifthly, in recent years, the labor productivity of HCMC has tended to increase rapidly and much higher than the labor productivity of the whole country Sixthly, the system linking labor supply and demand has been built and developed, which is quite effective in helping to connect supply and demand of labor better and better Seventhly, the institution of the labor market and the policies of the State for the labor market are increasingly being improved, ensuring the operation of the labor market in accordance with the objective laws of the market Eighthly, international integration has had a positive impact on the labor market in Ho Chi Minh City Cause of achievement: Ho Chi Minh City is the place where the market economy developed early; The City Government is very active to seize the opportunity from the integration process; There are many policies to improve the institutional system of labor market in line with international practices; there is a connection between labor supply and demand through employment services; the private sector and the foreign invested economic sector have developed strongly; the development of high quality human resources is valued At the same time, dynamic economic development has attracted a large number of high quality migrant workers 4.5.2 Limitations and reasons In addition to the achievements, the overall assessment of the labor market in Ho Chi Minh City has limitations in the process of integration, that is: Firstly, the labor supply is plentiful, the rate of training is high but the skills of the workers are weak This also leads to an imbalance in labor supply and supply, while labor supply is excessive, but labor that meets technical requirements is lacking in many sectors Secondly, unskilled labor demand tends to decrease rapidly but still accounts for the highest proportion of total labor demand 19 Third, labor productivity is lower than other countries in the region, which is a big challenge for HCMC in competing with the cities in the region and economic structural change according to modern trends Fourthly, temporary employment and informal employment tended to increase while the social security system did not cover the workforce in this area This is a vulnerable group in the integration process Fifthly, the labor market still has the segment of wages by gender, economic sector, etc Sixthly, labor disputes and strikes have been reduced but still quite tense, the efficiency of labor law enforcement is still poor Causes of restriction: economic restructuring is slow, quality growth and competitiveness is not high; The legal framework governing the operation of the labor market has not kept pace with the requirements, enforcement of labor relations institutions is weak; vocational guidance system, employment services, labor market information and education and training have many inadequacies, lack of effective link between the training and the use of human resources, etc Employment policies still focus mainly on job creation by width rather than on quality of employment, labor productivity growth and income improvement 21 market development must be linked to the socio-economic development orientation of the city in order to meet the objective of transforming the growth model and raising the competitiveness of the economy In addition, government policies must ensure fairness for actors that enter the labor market to promote both economic growth and social justice HCM's development policy needs to be set in the context of domestic and international because Ho Chi Minh City is a market economy developed strongly, having economic and cultural exchanges with localities in the country and in other countries in the world Orientation to develop HCMC labor market in international integration Development orientation of labor market in Ho Chi Minh City by 2025 should continue to improve the legal framework and labor market policies; to ensure the balance of labor supply-demand, to develop formal jobs and support workers who work in the informal sector; to focus on boosting labor demand in high technology industries and services to improve labor productivity; to focus on human capital investment to improve the quality of human resources, meet the needs and take advantage of opportunities from international integration; to build in a coordinated way the infrastructure of the labor market and to provide effective public services; strengthen the social security system for workers to prevent and overcome the risks of employment and income of workers, to make labor market activities safer and more efficient, minimize the risks for employees and vulnerability to external shocks during integration 5.2 Policy implications to develop HCMC's labor market in the context of international integration 5.2.1 Solutions to labor supply Solutions to improve the quality of human resources Firstly, linking human development strategy and economic development strategy Secondly, improve the quality of higher education and vocational training for human resources development Thirdly, mobilize resources for investment in human resources development Fourthly, enhance the responsibility and efficiency of state management of human resource development Fifthly, raising social awareness on human resources development 22 Solutions to improve the efficiency of the management of migrant labor supply Firstly, it is necessary to limit unskilled migrant workers and to attract highly skilled workers by economic policies rather than administrative measures Secondly, it is necessary to improve the efficiency of management of migrant workers in the country in the direction of creating favorable conditions and equality Thirdly, it is necessary to intensify measures to strictly control foreign workers who migrate to Ho Chi Minh City 5.2.2 Solutions to labor demand The shift of economic structure and structure of labor demand associated with transformation of growth model First of all, it is necessary to limit the development of laborintensive industries step by step, shifting economic structure in industries, focusing on the quality of growth on the basis of investing in high added value chains in the value chain, developing highly specialized labor-intensive industries, developing the industry based on modern technology and equipment in order to raise productivity, quality and efficiency The second is promoting economic structural change in the service sector, giving priority to the development of high-level services such as finance, science and technology, import-export services, health care and education, etc, creating demand and expanding the capacity to attract high quality labor in the country and abroad The third is to shift the agricultural structure towards high-tech agriculture, biotechnology, seedling centers of the region and is the place of export of agricultural products of the Southern major economic area and the whole country Business development, informal sector support The first is to improve the business environment for enterprise development, creating jobs for employees The second is to focus on developing policies to support and develop small and medium enterprises to promote labor productivity growth and improve the quality of employment and create incentives for the development of the economy The third is to support the informal sector to make business registration with the aim of improving working conditions and income; to consult and support the informal sector to access credit to improve 23 labor productivity and improve working conditions in this area; to encourage the informal sector to participate in production or cooperative groups and support the development of businesses and socio-economic organizations; to support the informal sector to access the market, especially through the provision of market information 5.2.3 Solutions on institutional improvement, labor market policy Improving the legal and institutional framework for the labor market Firstly, it is necessary to continue reviewing, amending and supplementing the labor law system in line with international standards on labor, employment and labor market, to comply with international practices and commitments to ensure equal treatment between employers and workers Secondly, it is necessary to intensify the supervision and inspection of the enforcement of labor rights laws Thirdly, it is necessary to build a mechanism for cooperation, dialogue, negotiation and agreement among parties in labor relations in order to ensure the harmonious interests of the parties and the common interests of the enterprises Fourthly, labor market institutions should continue to reform to ensure increased flexibility in the labor market under the State's regulation in conjunction with ensuring fair employment for workers Policy on linking supply and demand for labor Firstly, it is necessary to continue to improve the institution and policies and develop the employment service network as well as vocational counseling services both broad and diversified so that employees can easily access counseling and job referral services Second, employment channels need to be diversified The system of job exchanges should also be linked Thirdly, development of information system of labor market Improving the salary policy Firstly, the wage policy must be linked to the socio-economic development of the country, ensuring the principle of macro-balance and maintaining the socio-political stability Secondly, the wage policy must be consistent with the socialist market economy 24 Thirdly, wage policies must protect workers' rights, while also ensuring the welfare of workers and employers Implementation of social security and support for disadvantaged workers in labor market First of all, HCMC needs to effectively implement the social insurance policy, expand the coverage of compulsory social insurance and voluntary social insurance; and improve the conditions of the social insurance system to be more suitable for workers in the informal sector Secondly, the city must have a financial mobilization policy to increase investment in the social security system Thirdly, the city needs to strengthen human resources, physical and technical infrastructure to serve social welfare programs and policies Fourthly, the city needs to have policies to support retraining workers who have lost their jobs due to the restructuring of the economy before the requirements of integration CONCLUSION Over 30 years of renovation and integration, Ho Chi Minh City's labor market has been developing more and more HCMC has the largest labor supply in the country, with a high proportion of the working-age population and is in the period of golden population structure; the quality of labor supply is increasing Labor demand in Ho Chi Minh City also increased rapidly thanks to high economic growth rate Economic structure and labor structure shifted positively Salaries and wages are formed on the basis of agreement as required by the work and the qualifications of the employees, reflecting more accurately labor prices on the labor market At the same time, international integration and foreign direct investment also create jobs in the labor market in HCMC; The average wage of workers in FDI enterprises, import-export enterprises is higher than other enterprises and the difference is statistically significant In the process of integration, HCMC's social labor productivity tends to increase rapidly and much higher than that of the whole country; the labor supply-demand linkage system has been developed and developed, helping to connect employers and employees better and better The labor market institutions and policies of the State for the labor market are increasingly being improved, ensuring the labor market to operate 25 flexibly according to the objective laws of the market Therefore, it can be confirmed that the labor market in HCM City has actively developed in the process of international integration However, in the process of development, the labor market in HCM City still shows weaknesses, such as abundant labor supply in quantity but quality of labor is still low, this makes labor productivity in HCM City is lower than other countries in the region The supply-demand imbalance has been occurring for many years, new jobs have been increasing steadily over the years, but unemployment has been increasing Therefore, in order to improve labor market efficiency, it is necessary to have a system of synchronous solutions: perfecting labor market institutions, raising the quality of labor supply and increasing labor demand, improving the quality of service system in the labor market, etc In particular, improving the quality of labor supply is considered as the most important solution to improve the performance of the labor market, contributing to promoting growth, enhancing the competitiveness of the economy and raising the living standards of workers Recommendations on further research directions The labor market is a broad topic and can not be mentioned in the context of the thesis, so the next research directions of the topic are: - To study separately the connection between education and training policies and policies on development of labor market - Further assessment of the impact of trade liberalization and foreign investment on domestic labor mobility and international labor mobility - Do research on working conditions such as working time, workplace safety, labor standards, labor relations, etc In particular, we believe that if we have enough information, we will analyze the impact of trade liberalization and invest on the difference in employment and wages of workers by sector, by job placement, by professional qualification in the business sector to obtain a more comprehensive assessment 26 LIST OF PROJECTS AND RESEARCH PUBLISHED BY AUTHOR RELATED TO THE THESIS TOPICS A THE ARTICLE PUBLISHED ON MAGAZINE Pham Thi Ly (2017) Employment and income of employees in foreign invested enterprises in Ho Chi Minh City Journal of Science and Technology, Vol 20, p 52-63, ISSN: 2588-1051 Pham Thi Ly, Nguyen Thi Dong (2017): The effects of Vietnam’s economic restructuring on employment elasticity Journal of Development and Integration, Vol 32, p 56-61, ISSN: 1859-428 Pham Thi Ly (2016) Vietnamese labor market when participating TPP Journal of Economics and Forecasting, 24, pp.3436, ISSN: 0866-7120 Pham Thi Ly (2015) Vietnam Labor Market in ASEAN Economic Community: Opportunities and Challenges " Journal of Political Science, Vol 1, pp.34-41, ISSN: 1559-0187 Pham Thi Ly (2012) Labor export in the context of current Vietnamese economy and problems Journal of Binhduong’s Economics and Technology, No 6, pp 3-8 Pham Thi Ly, Nguyen Thanh Trong (2012) Vietnam's current human resources: Challenges to the economy and solutions for development, Journal of Economic Development, Vol 260, pp 10-17, ISSN: 185-1124 Pham Thi Ly, Nguyen Thanh Trong (2017) Solutions to improve the business environment for business development, Journal of Economics and Forecasting, 17, pp 19-21, ISSN: 0866-7120 B SCIENTIFIC RESEARCH PROJECTS Pham Thi Ly, Nguyen Thi Dong (2017) Studying the impact of economic restructuring on employment during economic growth in Vietnam Scientific research project at University level (Code: CS2016-40), Ho Chi Minh City University of Economics Pham Thi Ly (2015) The impact of international economic integration on labor market in Ho Chi Minh City Scientific research project at University level (Code: CS2014-89), University of Economics of Ho Chi Minh City Nguyen Thanh Van (Chair), Pham Thi Ly (Member) (2010) Promoting labor export in Ho Chi Minh City in the period of 2010 2020 Scientific research projects at ministerial level ... develop Ho Chi Minh City''s labor market in international integration Proposed solutions to develop the labor market in Ho Chi Minh City When proposing solutions to develop Ho Chi Minh City''s labor... international integration has had a positive impact on the labor market in Ho Chi Minh City Cause of achievement: Ho Chi Minh City is the place where the market economy developed early; The City Government... question, we chose to study the topic of "Ho Chi Minh Labor Market in International Integration" We chose to study the labor market in Ho Chi Minh City because this is the pioneering local about