Employment in enterprises in Vietnam during the period of macroeconomic imbalances 2007-2012 [Vietnamese language]
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2015
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Abstract
The period 2007-2012 witnessed a substantial growth slowdown associated with a high degree of economic volatility, which affected enterprises in all sectors. Analysis of data of Enterprise Census however did not support a common perception of widespread firm closedowns in Vietnam during this period. Instead, it finds that the number of enterprises increased steadily from year to year, although at a lower pace as compared to the pre-crisis period. It also finds that the rising number of enterprises closed down in this period does not have significant impact on employment, because the entry of new firms is more than compensating those that exited the market. As a result, employment continues to grow in this period, although at lower rates. The slowdown as measured by growth rates of firm’s revenues and profits was felt more strongly in 2012 as compared to previous years from 2007 to 2011. In the labor market, although employment growth rate was positive at the aggregate level, in some sectors such as wholesaling, retailing, and finance and banking, the number of workers declined.
The employment effects of growth slowdown, particularly in some specific sectors, may be resulted from structural weaknesses of the economy and therefore may persist for an extended period of time. This implies that in addition to general policy packages to support structural reforms to restore growth rates, it is important to put in place specific policies that facilitate reallocation of workers from shrinking to growing sectors in order to minimize the negative effects of the current growth slowdown and of the on-going large-scale economic restructuring program.
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Policy Brief
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