Assessing the Potential Impact of the Global Crisis on the Labour Market and the Informal Sector in Vietnam

Abstract

Although the impact was less dramatic than in other Asian countries, Vietnam has been affected by the international crisis which started in 2008, resulting in a significant slowdown of economic growth. This paper aims at assessing the impact of this economic crisis on employment, unemployment and the informal sector. Contrarily to previous studies on this subject, we anticipate a very small increase of unemployment. According to our estimates, most of the impact of the crisis in terms of employment will actually be felt in the informal sector, where most new entrants on the labour market and laid(off workers will end up working. This feature will result in an urgent need to put in place specific policies to tackle informal sector low productivity and its manpower's lack of labour protection.