Export Liberalization, Job Creation, and the Skill Premium: Evidence from the US–Vietnam Bilateral Trade Agreement (BTA)

SummaryThis paper explores how the expansion of labor-intensive manufacturing exports resulting from the 2001 US–Vietnam Bilateral Trade Agreement affected changes in wages in Vietnam through the channel of labor demand. Using the data on panel individuals from the Vietnam Household Living Standards Surveys of 2002 and 2004, and addressing the issue of endogeneity, the results confirm the existence of a Stolper–Samuelson type effect, i.e., those provinces more exposed to the increase in exports experienced a relatively larger wage growth for unskilled workers and a decline of (or a smaller increase in) the relative wage of skilled and unskilled workers.