講演情報
[1K03]Why Informality Persists: Understanding Job Choices in Vietnam’s Dual Labor Market
*崔 善鏡、*ミン インシク
キーワード：
Informal Sector、Decent Work、Dual Labor Market、Random Utility Model、Vietnam
Despite decades of formalization policies, informal employment remains dominant in developing economies. While existing literature primarily attributes this persistence to supply-side constraints such as regulatory barriers and institutional weaknesses, we examine an underexplored dimension: worker preferences for informal employment. Using Vietnam as a case study, we investigate whether workers actively choose informal jobs over formal alternatives, challenging the conventional assumption that formalization represents unambiguous welfare improvement.
We analyze job choices using Vietnam Household Living Standards Survey (VHLSS) data and construct a decent work index through Principal Component Analysis of formal employment characteristics: official contracts, paid leave, and social insurance coverage. Employing McFadden's Random Utility Model within a conditional logistic framework, our methodology enables estimation of preference parameters by exploiting variation in job characteristics faced by individual workers across different firm ownership types.
Our findings reveal that Vietnamese workers systematically prefer jobs with lower formality levels, even when controlling for wage differences. This suggests that informal sector persistence stems partly from genuine worker preferences rather than solely from supply-side market failures. However, substantial heterogeneity exists across demographic groups. Women demonstrate greater sensitivity to both wages and formal job benefits. Middle-aged workers show particularly strong wage sensitivity. Most notably, education creates a pronounced gradient, with higher-educated workers strongly preferring both higher wages and formal employment conditions.
These results suggest that formalization policies focused exclusively on reducing barriers may be insufficient. Understanding and addressing the demand-side factors that drive informality preferences is crucial for effective labor market policy in developing economies.
We analyze job choices using Vietnam Household Living Standards Survey (VHLSS) data and construct a decent work index through Principal Component Analysis of formal employment characteristics: official contracts, paid leave, and social insurance coverage. Employing McFadden's Random Utility Model within a conditional logistic framework, our methodology enables estimation of preference parameters by exploiting variation in job characteristics faced by individual workers across different firm ownership types.
Our findings reveal that Vietnamese workers systematically prefer jobs with lower formality levels, even when controlling for wage differences. This suggests that informal sector persistence stems partly from genuine worker preferences rather than solely from supply-side market failures. However, substantial heterogeneity exists across demographic groups. Women demonstrate greater sensitivity to both wages and formal job benefits. Middle-aged workers show particularly strong wage sensitivity. Most notably, education creates a pronounced gradient, with higher-educated workers strongly preferring both higher wages and formal employment conditions.
These results suggest that formalization policies focused exclusively on reducing barriers may be insufficient. Understanding and addressing the demand-side factors that drive informality preferences is crucial for effective labor market policy in developing economies.
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