Premium
Do Minimum Wage Increases Matter to Firm Profitability? The Case of Vietnam
Author(s) -
Cuong Nguyen Viet
Publication year - 2017
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.2920
Subject(s) - profitability index , minimum wage , propensity score matching , wage , profit (economics) , matching (statistics) , economics , labour economics , profit margin , difference in differences , demographic economics , econometrics , finance , microeconomics , statistics , mathematics
This paper measures the impact of a minimum wage increase in 2005 on profitability of private firms in Vietnam using a difference‐in‐differences with propensity score matching method. Data used for this analysis are from Vietnam Enterprise Censuses in 2004 and 2006. It is found that the impact estimate of the minimum wage increase in 2005 from 290 to 350 thousand VND on firms’ profit margins is very small and negative and not statistically significant. Copyright © 2013 John Wiley & Sons, Ltd.