mondo.international

Research notes · Trade

When a poor country gains access to a rich market, do its workers move into better jobs?

Export Markets and Labor Allocation in a Low-Income Country

Brian McCaig, Nina Pavcnik (2018) · American Economic Review 108(7)

Article ↗ · Replication data ↗ (openICPSR)

The archive requires an account we do not hold, so the files were not opened. What follows rests on the published abstract and on this platform's own observations.

What the authors found

McCaig and Pavcnik study the 2001 US-Vietnam Bilateral Trade Agreement, which sharply cut US tariffs on Vietnamese goods. They find the share of Vietnamese manufacturing workers in the formal firm sector rose by 5 percentage points, drawn out of informal microenterprises. The shift was larger in provinces more exposed to international trade and among younger workers, and because labour productivity is higher in the formal sector, the reallocation raised aggregate productivity.

What our data adds

The export boom that drove this has not stopped. Vietnam's goods exports to the United States stood at 14.2 billion dollars in 2010, reached 41.5 billion by 2017 and 119.4 billion by 2024 — more than eight times the 2010 figure in fourteen years. Whatever the 2001 agreement started, the shock the paper studies was the opening of a process rather than a one-off adjustment, and any assessment of its labour-market consequences is measuring an early slice of it.

Exports of goods and services, share of GDP

Vietnam against comparable exporters. The bilateral trade series cannot be drawn as a line without naming a partner, so this uses the national accounts measure instead.

FigureValueIndicator
Vietnam goods exports to the US, 2010 14.2bn USD IMTS.XG_FOB_USD.A
Same, 2017 41.5bn USD IMTS.XG_FOB_USD.A
Same, 2024 119.4bn USD IMTS.XG_FOB_USD.A

Every figure here is computed from observations in this database and can be charted, downloaded or queried.

What this cannot show

The IMF bilateral series begins in 2010, so it cannot show the 2001 agreement itself or the years the paper actually studies. That is a real gap: the note describes what came after the window rather than the window. Nothing here observes formality, wages or productivity, which are the paper's outcomes and come from Vietnamese labour force surveys.

The data behind it

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