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Higher Education Expansion, Earnings and Inequality in Vietnam

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Abstract:

Higher education in Southeast Asia has been challenged by ever-increasing enrolments, and Vietnam has proven no exception. The expansion of higher education in Vietnam can be explained by both an increase in the demand for and supply of higher education in the country. From the demand side, educational enthusiasm is found distinctively high in Vietnam in comparison with other countries at the same level of development. It has been argued that demand for education in Vietnam can be explained from the perspective of Vietnamese culture. Vietnam is part of the Confucian world which gives special respect for teachers, scholars, and mentors. At the same time, sustained economic growth, changes in labor structure and increasing economic returns to higher education may have motivated high school seniors to strive for higher education.
On the supply side, there have been major reforms in government policies that have directly contributed to higher education expansion. Right after Doimoi, the government encouraged the establishment of private higher education institutions. Moreover, public higher education institutions have been gradually given more autonomy in their decision making processes regarding tuition fees, and enrolment quotas. At the same time, by diversifying the higher education system, the government aims at building a network of higher education institutions with differentiation by function and educational mission.
The expansion of the higher education system has involved a significant increase of three-year colleges, making the three-year college versus four-year university choice an important one. There are also more choices among academic and vocational three-year colleges and among public and non-public institutions. Different types of institutions also charge various levels of tuition and fees. Tuition fees in public universities are around 4,000,000 to 6,800,000VND in academic year 2010, approximately 220 to 360 USD. Junior college tuition level is equal to 80 percent of that of university. Tuition fees in private institutions are more expensive, ranging from 300 USD to 5,000 USD per academic year.
Given the process of higher education expansion and differentiation in Vietnam, it is expected that higher education has a major impact on labor market outcomes. Differences in wages to different types of institution have long existed in the Vietnamese labor market, as reflected in employment practices that set a premium on the highest educational attainment of individuals. Vietnam Salary Surveys have also found there are big gaps in earnings among graduates from different types of higher education institutions.
Using the Vietnam Household Living Standard Survey in 2010, this study tries to find to what extent the higher education expansion influences labor market returns to different types of higher education institutions. Through examination of college choice and consequences on the labor market outcomes across different types of institutions, the study raises concerns about the possibility of growing inequality and reduced upward mobility for students from disadvantaged backgrounds resulting from the differentiation process inside the higher education system.
The study reviews the effects of higher education on individual earnings with heterogeneous returns. During the progress of higher education expansion, the number of universities and colleges has rapidly increased all over the country. As a result, between 1990 and 2007, thirty-five provinces have newly established universities and junior colleges. Forty provinces have at least one university; sixty provinces have at least one junior college. Improvement in higher education access can be partly explained by an expansion in the number of higher education institutions. Combined with information of the number of universities and junior colleges increased between 1990-2007, a database that assigns the number of newly established institutions to different provinces and cities are constructed. Using them as an instrument in an endogenous treatment-effects model, the study finds that higher education reforms have the potential of giving a high return, although we do not consider the issue of social cost.
Main References
Arcand, J., d'Hombres, B., & Gyselinck, P. (2004). Instrument choice and the returns to education: New evidence from Vietnam. Retrieved from http://129.3.20.41/eps/lab/papers/0510/0510011.pdf
Becker, G. S. (1993). Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3r ed.). Chicago: The University of Chicago Press.
Cameron, S. V., & Heckman, J. J. (1998). Life cycle schooling and dynamic selection bias: models and evidence for five cohorts of American males. Journal of Political Economy, 106(2), 262-333.
Wooldridge, J. (2010): Econometric Analysis of Cross-Section and Panel Data. Cambridge, MA: MIT Press.
The Education Development Strategic Plan for 2001-2010
Resolution on the renovation of higher education management for the period 2006-2014 (Resolution 14)
The Law on Higher Education 2012
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Name: Comparative and International Education Society Annual Conference
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MLA Citation:

Truong, Ha. "Higher Education Expansion, Earnings and Inequality in Vietnam" Paper presented at the annual meeting of the Comparative and International Education Society Annual Conference, Sheraton Centre Toronto, Toronto, Ontario, Canada, Mar 10, 2014 <Not Available>. 2014-12-10 <http://citation.allacademic.com/meta/p708586_index.html>

APA Citation:

Truong, H. T. , 2014-03-10 "Higher Education Expansion, Earnings and Inequality in Vietnam" Paper presented at the annual meeting of the Comparative and International Education Society Annual Conference, Sheraton Centre Toronto, Toronto, Ontario, Canada <Not Available>. 2014-12-10 from http://citation.allacademic.com/meta/p708586_index.html

Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: Higher education in Southeast Asia has been challenged by ever-increasing enrolments, and Vietnam has proven no exception. The expansion of higher education in Vietnam can be explained by both an increase in the demand for and supply of higher education in the country. From the demand side, educational enthusiasm is found distinctively high in Vietnam in comparison with other countries at the same level of development. It has been argued that demand for education in Vietnam can be explained from the perspective of Vietnamese culture. Vietnam is part of the Confucian world which gives special respect for teachers, scholars, and mentors. At the same time, sustained economic growth, changes in labor structure and increasing economic returns to higher education may have motivated high school seniors to strive for higher education.
On the supply side, there have been major reforms in government policies that have directly contributed to higher education expansion. Right after Doimoi, the government encouraged the establishment of private higher education institutions. Moreover, public higher education institutions have been gradually given more autonomy in their decision making processes regarding tuition fees, and enrolment quotas. At the same time, by diversifying the higher education system, the government aims at building a network of higher education institutions with differentiation by function and educational mission.
The expansion of the higher education system has involved a significant increase of three-year colleges, making the three-year college versus four-year university choice an important one. There are also more choices among academic and vocational three-year colleges and among public and non-public institutions. Different types of institutions also charge various levels of tuition and fees. Tuition fees in public universities are around 4,000,000 to 6,800,000VND in academic year 2010, approximately 220 to 360 USD. Junior college tuition level is equal to 80 percent of that of university. Tuition fees in private institutions are more expensive, ranging from 300 USD to 5,000 USD per academic year.
Given the process of higher education expansion and differentiation in Vietnam, it is expected that higher education has a major impact on labor market outcomes. Differences in wages to different types of institution have long existed in the Vietnamese labor market, as reflected in employment practices that set a premium on the highest educational attainment of individuals. Vietnam Salary Surveys have also found there are big gaps in earnings among graduates from different types of higher education institutions.
Using the Vietnam Household Living Standard Survey in 2010, this study tries to find to what extent the higher education expansion influences labor market returns to different types of higher education institutions. Through examination of college choice and consequences on the labor market outcomes across different types of institutions, the study raises concerns about the possibility of growing inequality and reduced upward mobility for students from disadvantaged backgrounds resulting from the differentiation process inside the higher education system.
The study reviews the effects of higher education on individual earnings with heterogeneous returns. During the progress of higher education expansion, the number of universities and colleges has rapidly increased all over the country. As a result, between 1990 and 2007, thirty-five provinces have newly established universities and junior colleges. Forty provinces have at least one university; sixty provinces have at least one junior college. Improvement in higher education access can be partly explained by an expansion in the number of higher education institutions. Combined with information of the number of universities and junior colleges increased between 1990-2007, a database that assigns the number of newly established institutions to different provinces and cities are constructed. Using them as an instrument in an endogenous treatment-effects model, the study finds that higher education reforms have the potential of giving a high return, although we do not consider the issue of social cost.
Main References
Arcand, J., d'Hombres, B., & Gyselinck, P. (2004). Instrument choice and the returns to education: New evidence from Vietnam. Retrieved from http://129.3.20.41/eps/lab/papers/0510/0510011.pdf
Becker, G. S. (1993). Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3r ed.). Chicago: The University of Chicago Press.
Cameron, S. V., & Heckman, J. J. (1998). Life cycle schooling and dynamic selection bias: models and evidence for five cohorts of American males. Journal of Political Economy, 106(2), 262-333.
Wooldridge, J. (2010): Econometric Analysis of Cross-Section and Panel Data. Cambridge, MA: MIT Press.
The Education Development Strategic Plan for 2001-2010
Resolution on the renovation of higher education management for the period 2006-2014 (Resolution 14)
The Law on Higher Education 2012


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