Role of Individual Characteristics and Policies in Driving Labor Informality in Vietnam

Using data from the Vietnam Labor Force Survey, this paper takes a granular look at the mostsalient drivers of labor informality in Vietnam by examining: (i) the nature of labor informalityand transitions from formal to informal employment status and the role of worker characteristics;(ii) the empirical likelihood of being in informal employment and the policy determinants ofinformality using within-in country variation in the business climate and governance; and (iii)whether different...
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Using data from the Vietnam Labor Force Survey, this paper takes a granular look at the mostsalient drivers of labor informality in Vietnam by examining: (i) the nature of labor informalityand transitions from formal to informal employment status and the role of worker characteristics;(ii) the empirical likelihood of being in informal employment and the policy determinants ofinformality using within-in country variation in the business climate and governance; and (iii)whether different policy reforms have a differential impact on workers. Our analysis sheds lighton how individual characteristics and policy impediments contribute to high levels of informalityand points to the need for a comprehensive agenda to tackle informality.