THE RETURN TO SCHOOLING IN VIETNAM FROM 2014 TO 2018: AN EVALUATION BASED ON INSTRUMENTAL VARIABLES

Abstract

Education and training play a very vital role in the income of a worker, the sustainable economic development of the country, and reduction of inequality. This study aims to examine the return to schooling of salaried workers in Vietnam, aged from 15-65 years old. A regression model with an instrumental variable is used to tackle the endogeneity problem. We use the Vietnam Household Living Standard Survey in 2014-2016 and 2018. The average economic return to schooling are 4% for workers and are stable for the studied periods. The demographic characteristics of employees, such as age, gender, marital status and ethinicity, have a significant impact on hourly earnings. Laborers working in the public sector and companies with foreign investment have higher income than those working in the private sector. The research results provide more scientific evidence for policymakers and employees in wage policies and investment in education for human resources in the future.