Gender Gap in Earnings in Vietnam: Why Do Vietnamese Women Work in Lower Paid Occupations?

Differences in earnings between male and female workers persist in developed and developing countries despite a narrowing of gaps in educational attainment. This paper examines the gender wage gap in Vietnam and shows that a non-trivial part of the gap is associated with occupational sorting. The study considers three explanations for why occupational sorting emerges. First, data from Labour Force Surveys support the hypothesis that women sort into occupations with better non-monetary characteristics, such as paid leave and shorter hours. Second, the findings do not support the hypothesis of occupational sorting among the adult labour force as being driven by social norms about gender roles learned at an early age. Specifically, the analysis simulates what the gender wage gap would be if children pursued the occupations they aspired for at the age of twelve, and the distribution of salaries remained unchanged. Finally, there is no evidence to support the claim that individuals with higher education sort during the school-to-work transition, when women face higher barriers in finding a job in their field of study. Overall, the findings suggest that, in Vietnam gender-specific preferences for non-monetary job characteristics play a key role in the emergence of occupational sorting.