Globalization and Labour Markets in Boom and Crisis: The Case of Vietnam

This paper examines the impact of the global financial crisis on the Vietnam labour market against the backdrop of economic performance and labour dynamics before the crisis. The impact on labour has been milder compared with several neighbouring countries, than might have been expected for a country with Vietnam's degree of international exposure. This can attributed to the timely stimulus package of late 2008, the tight labour market before the crisis, the competitive nature of Vietnam's key exports and the private sector's capacity to compete globally. Although flexible labour markets have ensured low unemployment, I argue that aspects of the institutional environment have contributed to slower labour market adjustment. Shortages of skilled labour, labour market rigidities and an under-developed industrial relations system could delay recovery and constrain future growth.