The gender wage gap and the presence of foreign firms in Vietnam: evidence from unconditional quantile regression decomposition

Abstract

PurposeThe objective of this study is to estimate the gender wage gap in Vietnam and its rural and urban areas, especially with the presence of foreign firms.Design/methodology/approachThe authors use cross-sectional data from three rounds of the Vietnam Household Living Standards Survey (VHLSS 2008, 2012, and 2016) to investigate this issue. The unconditional quantile regression and Oaxaca–Blinder (OB) decomposition are used in this article.FindingsThe article finds the gender wage gap favouring men, especially in higher quantiles of the wage distribution. The gap in urban Vietnam was higher than in rural areas. The OB decomposition indicates that gender wage gap is mainly driven by gender discrimination. The differences in return to participation in foreign companies only contributed significantly and positively to such a gap in some models. It suggests that the gap in those models is affected by gender discrimination in employment opportunities in foreign companies. Regarding the endowment effect, some models provide the significantly negative impacts of foreign firms on gender wage inequality.Originality/valueThe study suggests that policies to reduce the gender wage gap should pay more attention to foreign firms, especially at higher wage classes.