Economics Webinar - Trade, Structural Change and Labour Market Transitions in Vietnam

We provide novel evidence on how structural change occurs at the individual level in a low-income country. The 2001 U.S-Vietnam Bilateral Trade Agreement led to a large increase in employment in formal manufacturing in Vietnam. We show individuals moved into the most exposed industries from all initial activities. Transitions from other manufacturing, agriculture, and school account for most transitions. There are significant differences in the likelihood of moving into these industries based on initial activity even after conditioning on gender or education. Transitions to these industries were more likely in the districts most exposed to the export demand shock.