Manuscript: Heterogenous returns to education in labor markets: New evidence from Vietnam

Abstract

This study investigates the return to education in Vietnam using nationally representative Labor Force Surveys from 2016, 2019, and 2022. While our findings align with previous studies, showing a significant decrease in the returns to higher education, our analysis contributes new evidence in three respects. First, by using the most recent labor force data, we provide updated estimates of returns to education during a period of rapid educational expansion and labor market transformation. Second, we document sectoral heterogeneity: since 2019, returns to education have been higher in informal than in formal employment, marking a reversal of the traditional pattern and suggesting potential wage compression in the formal sector. Third, we find important gender differences, showing that women continue to experience higher returns to education than men, with the gender gap narrowing over time.