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 THE 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 1.5 Research hypothesis 1.6 Data and methodology Thesis structure CHAPTER II: LITERATURE REVIEW 2.1 Definition 2.2 Theoretical framework 2.2.1 Mincer's Early Work on experience, 1958 2.2.2 The Schooling- Earning Function 2.2.3 Theory of human capital 10 Empirical studies 12 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 18 3.3 Education achievements 21 3.4 Education expenditure 21 3.5 Employment and income 22 3.5.1 Employment 22 3.5.2 Incotne 23 3.6 Factors affect on earnings 25 3.6.1 Education 26 3.6.2 Experience 26 6.3 Gender 28 3.6 Region 28 3.6 Economic sectors 28 CHAPTER IV: DATA AND METHODOLOGY 4.1 Statistic analysis 29 4.2 Regression model of earning function 32 4.3 Regression results 35 4.4 Estimate coefficients 35 4.4.1 Gender disparity in returns to education 40 4.4.2 Economic sector disparity in returns to education 42 4.4.3 Regional disparity in returns to education 44 CHAPTER V: POLICY IMPLICATIONS AND CONCLUSIONS 5.1 Conclusions 46 5.2 Recommendations 47 5.2.1 Recommendations for employees 47 5.2.2 Recommendations for policy makers 48 5.3 Limitations and areas for further research 48 LIST OFT ABLES Table 1: 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 GOP 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 Table 10: Vietnam Earning function Table 11: Vietnam Extended earning function oo oo oo ooooOOOOooooOOOOooooooOOOOoo ooooooooooooooooooooooooooooooooooooooooooooooooooo 38 38 Table 12: Vietnam: Earnings functions by Gender 41 Table 13: Vietnam: Extended Earnings functions by Gender 00 00 00 00 00 00 42 Table 14: Vietnam: Earnings functions by sector of employment (both sexes) 43 Table 15: Vietnam extended earning function by economic sector 43 Table 16: Vietnam: Earnings function by Region oo oo ooooOooooooooooooooooooooooooo Table 17: Vietnam: Extended earnings function by Region 00 45 45 The impacts of education on earnings In the case of Vietnam 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 Moi 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 1.1 INTRODUCTION The human capital theory views earnings of a \vorkcr as returns to his or her knowledge capital that have developed through years of schooling and work experience Early works of Becker and Chis,vick (Becker and Chiswick 1966) laid the foundation of this literature and later Mincer (Mincer 1974) proposed an empirical approach to distinguish the contribution of schooling and experience in wage earnings The well-known model of Mincer is "Human capital earnings function; include the log of individual earnings as the explained variables and schooling and experience are as explanatory variables Recent studies of education and earning were almost embedded in the framework of Mincer and combined with different contexts with additional important of the household and community characteristics institutional f~tctors and other observable attributes such as gender ~ economic sectors regions Card (Card 1999) survey the literature on the causal relationship between education and earning This Paper focuses on Vietnam Since Vietnam has successful in economic reform when the economy was transfen-cd from centrally planned to market economy in 1996, the economic transition has led to certain issues in the labor market, education was dctennined important in earnings, the higher the level 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 economics this relation was limited, in Lao people's democratic Republic (Phanhpakit and Education and Earnings in Lao PDR 2006) or in China (Xie and Human 1996) but they ten to increase as market economy such as in Hong Kong (Tony Chan, 1996) and Czech Republic and Slovakia (Chase 1998) This paper examines the returns to education in Vietnam on the basis of earnings data were collected by Vietnam Living standard Survey in the year 2004 (VLSS 2004), It is to attempted to estimate differential returns to schooling for Vietnamese, male and female, rural and urban areas and also between the public and private sector It is hoped to provide a bench mark to examine the effects of market liberalization and education reform 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 division process, the sector which Vietnam has competitive advantages According to integration to the World economy, Vietnamese have chances to access to advanced technologies and modem management techniques with increasing labor productivity and increasing wages Accompany with that more challenges face low skilled workers; lower earnings, since the gape of earning between skilled and unskilled are bigger 1.3 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 necessary 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 descriptive and multivariate analysis In the multivariate analysis an econometric technique will be applied, and the basic of human capital earnings functions by Mincer is used to calculate the rate of return to education Sampling frame will be created from VLSS database Thesis structure Thesis is organized into five chapters The first Chapter is introduction, second chapter is overview of human capital theories and empirical studies, the third chapter is described briefly Vietnam economy, population, employment and education, and the fourth chapter mentions the methodology of study and regression model of the impact of education on earnings and describes variables and data, Chapter five including collusions which based on the results of the regression and mentions some appropriate solution to the authorities with concerning on education CHAPTER II: LITERATURE REVIEW 2.1 Definition 2.1.1 Income: '"Income refers to all cash inflow streams to an individual from all sources" (Tony Chan, Stephanie Kent, Sum Lam, Shirley Li, ECON 374 Hong Kong Economy Term Paper) 2.1.2 Wage: "Wage refers to the monthly or yearly compensation from her/his employment'' (Tony Chan, Stephanie Kent, Sum Lam, Shirley Li, ECON 374 Hong Kong Economy Term Paper) 2.1.3 Earnings: "Earnings refers to the compensation per unit labor input, or, m more familiar words, the ability an individual can earns using a fixed amount of labor (Tony Chan, Stephanie Kent, Sum Lam, Shirley Li, ECON 374 Hong Kong Economy Term Paper) It is the best estimated to the productivity of labor and we will take this denotation throughout our paper" 2.1.4 "Education: is fundamental to enhancing the quality of human life and ensuring social and economic progress'' (Micheal P Todaro, Stepphen C Smith, Economic Development, Eighth Edition) 2.1.5 Human capital: "Productive investments embodied in human persons This includes skills, abilities, ideals, and health resulting from expenditures on education, on thejob-training programs, and medical care" (Becker, 1993) 2.2 Theoretical framework There are many different theories of the education and earning, each theory has different interpretations of different variables but most theories was built around a core model of returns to education or human capital earnings function, different earnings model are introduce as followings: 2.2.1 Mincer's Early Work on experience Mincer introduced "Investment in Human capital and Personal Distribution" in 1958, this study is one of the early theory studied the effect of labor market experience or on the-job-training on the determination and distribution of earnings Mincer's model marginal effect of education on earnings in 2004 \Vas much higher This reflects the effects of economic reforms over the ten-year period in both the education sector and the labor market Generally, gender has a positive effect on earnings which means that men has higher earnings than women Gender disparity in 2004 survey was high, male wage earners received 32 percent higher than identical female w·age earner It could be explained as below; First education investment in women brings higher return than investment in men's education thus access to education for women must be lower than for men Second, as our result is interpreted upon condition of having a wage-earnings joh may be lack of skill women to participate in labor force Difference rates of marginal etTcct of education between employees working in the public and private sector is found prominently at college and university level in 2004 survey The marginal effect of college education for private wage earner is higher than the public counterpart 99 percent and 71 percent for university education The disparity in earnings between economic sectors suggests that labor market in Vietnam is not perfectly competitive hut rather segmented Wages of workers \vith similar skills employed in different sector arc not equal, this could be concluded that there exist structural differences across sectors Regional disparity in earnings is most prominent between rural and urban area In general, an extra year of schooling is expected to increase earnings of employees in urban percent higher than in rural areas The evident implication show that education quality especially lower education levels is very poor in rural area 5.2 Recommendations 5.2.1 Recommendations for employees Vietnam with further integration into the world economy, Vietnam has more change to strongly to involve in the international labor division process, the sector with more competitive advantages shall have more opportunities for development as the result of the expanded market, thus, more job oppottunities are created, and Vietnamese enterprises have chances to access to advanced technologies and modem management technique which are resulted to more new jobs generation Economic 47 globalization shall bring more opportunities for employees but these opportunities accompany \Vith challenges of more rapid change of technologies management it means that cheap labor is no longer as advantage, instead good quality of labor, so Vietnamese employees have been trained and retrained to increase at professional and skill level 5.2.2 Recommendations for policy makers As discussed above primary education and university education arc the most profitable but with present direct costs is a heavy burden for most families especially for the poor Vietnam's policy makers may consider direct subsidization of poor primary schooling age children to ensure that they enroll in school and remain enrolled Education and vocation training should concentrate on skills and competency shifting from occupational training to skills and multi-skills training, widening subjects oftraining to attain high compatibility It is needed to establish training system for practical technical skill \vorkers with ditTerent levels (Semi-skilled, skilled and high skilled level) and training must he demand driven and also needed for planning and projection of network of practical technical training institutions investing in a number of technical and high tech schools in some critical economic 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 Vietnamese Government has invested more money into education system, but not enough to modernize education system to modernize its education system, Vietnamese Government should reassess pricing policy to increase cost recovery at the higher education level to reduce the gap between social and private rates of return as \Vell as to reinvest into education system infrastructure 5.3 Limitations and areas for further research There are also some limitations at this study As mentioned in chapter on the scope of the thesis our sample is confined to only the wage earners so that all results are 48 conditional upon being a wage earner while over 80 percent of Vietnam labor force is self-employed and many have multiple job An analysis of the other sectors of the labor market will give more complete picture of the impact of education but is beyond the scope of this thesis The implication on returns to vocational training is restricted, can not be assessed because there is no observation in sample Due to the limited size of the extracted data set, the research has not analyzed though taking into consideration the differences between seven geographical regions and between industries Sector impact on worker's earnings may be caused by different work intensity of the industry Industry impact also might come from price distortions due to various policies most notably trade protection policies Another limitation is in the analysis of economic sector disparities The rate of return to education to the public sector \Vorker and private sector worker should take into account the selection bias of sector choice Probability of working in an economic sector should be considered as endogenous factor and full information maximum likelihood should be estimated Disparities in the rate of return to education bet\veen gender, sector or region can also be further analyzed to determine the possible and significant factors that cause such differences The results of these studies will clarify recommendations and measures for the government to narrow the income and education gap between different 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 t-Statistic Pro b SCHOOLING MALE RURAL PUBLIC EXPERIENCE EXPERIENCE2 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 0000 0.0000 0.0000 0.0008 0.0047 0.0000 0.0000 c 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 dependentvar 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 Pro b PRIMARY LOWSECONDARY UPPERSECONDARY COLLEGE UNIVERSITY MALE RURAL PUBLIC EXPERIENCE EXPERIENCE2 0.119037 0.154019 0.402287 0.777372 0.829534 0.213584 0.485103 0.120566 0.021955 -0.000610 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 c Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 50 8.953302 0.840024 2.073093 2.101552 116.2586 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 Std Error t-Statistic Pro b SCHOOLING EXPERIENCE EXPERIENCE2 0.092111 0.019187 -0.000504 8.306826 0.007815 0.012804 0.000211 0.216034 11.78575 1.498505 -2.387176 38.45154 0.0000 0.1346 0.0173 0.0000 c R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.270544 0.266732 0.703246 283.8742 -614.6552 1.784589 Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 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 Pro b PRIMARY LOWERSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 -0.270785 0.200857 0.480828 0.631480 0.809589 0.020285 -0.000567 9.009530 0.131018 0.124616 0.123967 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 c 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 dependentvar 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 Pro b SCHOOLING EXPERIENCE EXPERIENCE2 0.043817 0.011431 -0.000403 8.397930 0.005679 0.008523 0.000134 0.142093 7.715123 1.341251 -3.010182 59.10161 0.0000 0.1801 0.0027 0.0000 c 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 dependentvar Akaike info criterion Schwarz criterion F-statistic Prob( F-statistic) 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 Pro b PRIMARY LOWERSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 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 Sum squared resid Log likelihood Durbin-Watson stat 0.133022 0.128139 0.667246 553.4058 -1264.930 1.747026 c Mean dependent var S.D dependentvar Akaike info criterion 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 i Dependent Variable: LNEARNING Method: Least Squares Date: 03/26/08 Time: 22:05 Sample: 225 Included observations: 225 Variable Coefficient Std Error t-Statistic Pro b SCHOOLING EXPERIENCE EXPERIENCE2 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 c 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 dependentvar 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 Pro b PRIMARY LOWERSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 -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 Sum squared resid Log likelihood Durbin-Watson stat 0.408115 0.388934 0.608645 80.01704 -202.5487 1.683134 c Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 53 9.264971 0.778611 1.879899 2.001744 21.27657 0.000000 APPENDIX V 5.1 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 Pro b SCHOOLING EXPERIENCE EXPERIENCE2 0.086925 0.009511 -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 c 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 dependentvar 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 Pro b PRIMARY LOWERSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 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 c R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob( F-statistic) 0.436604 0.408434 0.723322 73.24723 -157.9534 1.977577 54 8.422750 0.940438 2.242613 2.404625 15.49899 0.000000 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 Pro b SCHOOLING EXPERIENCE EXPERIENCE2 0.067785 0.008590 -0.000331 8.283919 0.006027 0.007700 0.000112 0.138602 11.24634 1.115570 -2.956161 59.76756 0.0000 0.2648 0.0032 0.0000 c 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 dependentvar Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 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 Pro b PRIMARY LOWSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 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 c R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.196155 0.191724 0.687940 601.0425 -1331.351 1.728298 Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 55 8.721044 0.765193 2.096011 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 Pro b SCHOOLING EXPERIENCE EXPERIENCE2 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 c 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 dependentvar 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 Pro b PRIMARY LOWSECON UPPERSECON COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 -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 c 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 dependentvar 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 Std Error t-Statistic Pro b SCHOOLING EXPERIENCE EXPERIENCE2 0.050488 0.013649 -0.000463 8.314620 0.005354 0.007233 0.000108 0.128706 9.430226 1.886973 -4.283184 64.60173 0.0000 0.0594 0.0000 0.0000 c 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 Mean dependent var S.D dependentvar 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 Pro b PRIMARY LOWERSECON DAR y UPPERSECONDARY COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 0.256919 0.205984 0.056423 0.053580 4.553404 3.844460 0.0000 0.0001 0.400957 1.042216 0.980175 0.017543 -0.000540 8.427940 0.062962 0.145486 0.111355 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 c 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 Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob( F-statistic) 57 8.701842 0.747537 2.060874 2.090858 45.40301 0.000000 9.1 Vietnam: Earnings function by urban region Dependent Variable: LNEARNING Method: Least Squares Date: 05/24/08 Time: 15:30 Sample: 803 Included observations: 803 • Variable Coefficient Std Error t-Statistic Pro b SCHOOLING EXPERIENCE EXPERIENC2 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 c R-squared Adjusted R-squared S E of regression Sum squared resid Log likelihood Durbin-Watson stat Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob( F-statistic) 0.291544 0.288884 0.685079 374.9977 -833.6916 1.712663 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 Pro b PRIMARY LOWERSECON DAR -0.200213 0.170799 0.109563 0.102582 -1.827381 1.665004 0.0680 0.0963 UPPERSECONDARY COLLEGE UNIVERSITY EXPERIENCE EXPERIENCE2 0.492177 0.649807 0.854331 0.035116 -0.000836 8.753814 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 y c Mean dependent var S.D dependentvar Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 58 9.391399 0.812402 2.103503 2.150211 45.59729 0.000000 REFERENCES Becker, G.S and Chiswick, B.R, 1966, Education and the distribution of earnings - ' (American Economic review, Papers and Proceedings) Byron, Raymond P and Evelyn Q.Manolato, 1990 Relllms /o Education in China (Economic Development and Cultural change) Dao Quang Vinh " Labour market and 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