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Studies in Systems, Decision and Control 531
Nguyen Ngoc Thach
Nguyen Duc Trung
Doan Thanh Ha
Vladik Kreinovich Editors
Partial
Identification
in Econometrics
and Related
Topics
Editors
Nguyen Ngoc Thach
Ho Chi Minh University of Banking
Ho Chi Minh City, Vietnam
Doan Thanh Ha
Ho Chi Minh University of Banking
Ho Chi Minh City, Vietnam
Nguyen Duc Trung
Ho Chi Minh University of Banking
Ho Chi Minh City, Vietnam
Vladik Kreinovich
Department of Computer Science
University of Texas at El Paso
El Paso, TX, USA
ISSN 2198-4182 ISSN 2198-4190 (electronic)
Studies in Systems, Decision and Control
ISBN 978-3-031-59109-9 ISBN 978-3-031-59110-5 (eBook)
https://doi.org/10.1007/978-3-031-59110-5
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The Impact of Internet Usage
on the Labor Market in Vietnam
Thuong Thi Vu, Thang Tat Vo, and Chon Van Le
Abstract This study investigates the impact of Internet usage on the probability of
working in the non-farm self-employment sector and labor income in Vietnam. We
employ the random walk Metropolis-Hastings Markov chain Monte Carlo method
with data from the Vietnamese Household Living Standards Survey in 2018. Empir-
ical results show that Internet usage increases the probability of self-employment
in the non-farm sector by 11.8%. Educational attainment facilitates access to non-
farm self-employment. Household characteristics such as age, gender, place of res-
idence and marital status are also important factors that impact the probability of
self-employment in the non-agricultural sectors. The impact of Internet usage on
earnings is heterogeneous across gender, and dwelling areas. Internet significantly
enhances earnings for male-headed households, and dwelling in urban areas. The
results also point out that it does no good to participate in local associations which
tend to reduce the probability of self-employment in the non-agricultural sectors as
well as labor income.
Keywords Internet usage ·Self-employment ·Labor income
T. T. Vu (B)
University of Danang, Campus in Kon Tum, Kon Tum, Vietnam
e-mail: vtthuong@kontum.udn.vn
T. T. Vo
Health and Agricultural Policy Research Institute and School of Economics, University of
Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam
e-mail: thangvt@ueh.edu.vn
C. Van Le
International University, Vietnam National University—Ho Chi Minh City, Ho Chi Minh City,
Vietnam
e-mail: lvchon@hcmiu.edu.vn
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2024
N. Ngoc Thach et al. (eds.), Partial Identification in Econometrics and Related Topics,
Studies in Systems, Decision and Control 531,
https://doi.org/10.1007/978-3-031-59110-5_41
619
620 T. T. Vu et a l.
1 Introduction
Since the end of the 20th century, the rapid development of Information and Com-
munication Technology (ICT) has facilitated the exchange of information and thus
strengthened market accessibility, reduced searching and transaction costs, and
increased income for people, especially people in developing countries [ 22,49,57].
Therefore, policymakers across the world consider ICT as a unique opportunity for
countries to connect their residents to services and jobs as well as promote economic
growth and prosperity [ 50,62].
The advent of the Internet is possibly one of the most important technological
developments in recent years which has significantly affected on labor market [17,23,
59]. From the labor supply, human capital is necessary, but not sufficient for workers
to successfully enter the labor market due to asymmetric information in the labor
market which prolongs the job search process and the connection between supply and
demand. The Internet has thus increased the ease and availability of job information in
the labor market [ 60]. In addition, using the Internet not only enhances human capital
but can also increase social capital through strengthening connections and expanding
the network of relationships among members of the community [ 51,64]. As a result,
the Internet has significantly reduced information costs for job seekers, allowing them
to find suitable jobs at a lower cost. The Internet also reallocates employment among
manufacturing industries, in which jobs tend to shift from activities of traditional
manufacturing industries to new economic activities. Klonner et al. [ 34] emphasize
that Internet accessibility leads to a shift from agricultural jobs to other areas for men.
They indicate that ICT reduces employment in the manufacturing sector, but such
a decline is offset by an increase in employment in the service sectors. Moreover,
Internet accessibility also has a positive impact on women’s labor force participation.
The ability to balance between raising children and working is especially important
in low-income countries. The Internet increases work flexibility, allowing mothers
to balance parenting time with work, especially part-time jobs [ 9,11].
Over the past 30 years, Vietnam has experienced rapid economic growth with a
low unemployment rate, however, the labor market has faced several challenges. In
particular, the proportion of the population active in the agricultural sector which
experiences the lowest productivity rate is quite high. Roughly 39% of the labor
force work in the agricultural sector, while nearly 26 and 35% of them earn their
living in the industrial and service sector, respectively [ 25]. In addition, each year,
Vietnam has about 1 million people enter the working age which is an important
competitive advantage of Vietnam in attracting foreign investment, contributing to
socio-economic development, but also putting pressure on job creation. During the
2011–2019 period, although Vietnam underwent a low unemployment rate, usually
around 2% [ 28], its large informal low-paying economy, insufficient social insurance,
unemployment insurance, and other social benefits.
Internet has been eagerly received by a relatively young population in Vietnam.
Between 2010 and 2020, the number of Internet users increased by an average of
The Impact of Internet Usage on the Labor Market in Vietnam 621
18.5% per year; as of February 2022, there were 72.10 million Internet users, account-
ing for 73.2% of its population, 4.9% higher than in 2021 [ 18]. In the context of an
exploding labor market, online job resources have provided useful information and
become an effective tool for the connection between labor supply and demand. Apart
from traditional sources of job information such as employment brokerage offices
or recruitment announcements, the development of the Internet has made job search
websites or employment recruitment websites of enterprises become increasingly
popular. According to the job outlook Report 2017 of Job Street, there were up to
47% of Vietnamese candidates look for jobs via the Internet. Among them, 24 percent
of candidates looked for jobs through online job sites, 11% of candidates through
recruitment company’s websites, and 12% of candidates through social networks.
Using a sample of 26,664 household heads across six regions of Vietnam
and employing the random walk Metropolis-Hastings Markov chain Monte Carlo
method, this study examine the impact of Internet usage on the probability of work-
ing in the non-farm self-employment sector and labor income in Vietnam. The results
makes two contributions to the literature. Firstly, while previous literature in Vietnam
has focused on the impact of the Internet on household welfare [ 44] and the impact
of the Internet on agricultural production [ 32], this paper provides the first attempt to
examine the impact of Internet usage on the outcome of the labor market, including
the probability of working in the non-farm self-employment and on labor income.
Second, this study focuses on analyzing the heterogeneous impacts of Internet usage
on different groups in terms of inhabited area (rural or urban area), gender that affect
the willingness to adopt ICT as well as the use and exploitation of the vast amount of
information available in the Internet. The research results will provide useful infor-
mation for policymakers at all levels to better understand the impact of the Internet
on outcomes of labor markets and on that foundation, justifies Internet infrastructure
so that the Internet becomes an effective tool for the socio-economic development
of the country.
2 Literature Review
2.1 The Impact Mechanism Between the Internet
and Employment
Previous studies show that with the strengths of low access costs and rapid infor-
mation transmission via the Internet significantly affect the functioning of the labor
market through three basic mechanisms. Firstly, information technology creates a
connection between businesses and laborers in the recruitment and job-seeking pro-
cess [ 3,26,67]. Secondly, information technology enhances social capital, which
plays an important role in the job-seeking process [ 13,46]. And thirdly, information
technology enhances productivity and thus promotes self-employment [ 6,69].
The Internet Creates a Connection Between Businesses and Employees
622 T. T. Vu et a l.
The Internet has got over the essential problem of information asymmetry in labor
market. It provides all information to the greatest extent, quickly and up-to-date with
low costs; thus changing the way businesses and workers are connected [ 3,67].
Indeed, compared to traditional channels that provide job information, the Internet
has become a more effective tool for businesses t o post recruiting information and
connect with job seekers [ 26].
Thanks to the Internet, while businesses can find potential candidates for job posi-
tions, workers can find jobs that match their skills and offer desired salary. As a result,
the Internet has shortened unemployment spells and reduced the unemployment rate
by promoting interaction between labor supply and demand. Kuhn and Mansour [ 39]
demonstrate the positive effects of seeking jobs in the Internet on the reduction of
unemployment duration in the United States. In addition, Bhuller et al. [ 10] find a
similar effect in Norway. However, for this positive effect to occur, companies and
workers must treat the Internet as an important tool for recruiting and seeking jobs.
In other words, the Internet access level is a crucial factor. Indeed, Kuhn et al. [ 40]
point out that seeking a job via the Internet is not effective in cutting down unem-
ployment time. This can be explained by the low level of Internet utilization during
the recruiting and job-seeking process in the US labor market at the time of the study.
The Internet Promotes the Expansion of Social Capital
Social capital is created through building relationships with others [ 14,48,53,55].
This is a type of capital whose value can be measured [ 1,20,55]. Social capital
facilitates the pursuit of individual goals [ 14]. And supporting an individual can
improve economic well-being by leveraging relationships with those around them
[ 54]. Social capital comes in three forms: (i) bonding, (ii) bridging, and (iii) link-
ing. Bonding social capital is the capital existing within groups and communities.
Bridging social capital exists in relationships between individuals that extend beyond
certain groups, or communities (between individuals in one group, one community,
and individuals in another group, another community). Linking social capital is the
type of capital that links one group to another, and one social class to another. It
emphasizes inequality, and unevenness in advantages or resources between the par-
ties. The Internet provides opportunities for the creation of bridging and linking
social capital while helping maintain existing bonding social capital.
The Internet is an effective tool for maintaining existing social relationships and
creating new ones for the majority [ 8,52]. Therefore, the Internet plays an impor-
tant role in job search processes, especially for those with low education, and in
job markets with little recruitment information [ 13,46]. Indeed, acquaintances or
relationships such as friends and relatives are important channels in spreading infor-
mation about job opportunities among job seekers; especially information difficult to
extract from other channels (such as an accurate description of working conditions
at the company) [ 24,45,47]. Kramarz and Skans [ 36] analyze the role of social
networks and relationships of recent graduates in their job-seeking process and find
that social networks are an important factor in the job-seeking process of young
people. In addition, the Internet helps to expand social capital and thus facilitates
self-employment [ 7,65,68].
The Impact of Internet Usage on the Labor Market in Vietnam 623
The Internet Helps Boost Productivity
Information and media networks have a significant impact on the productivity of
most industries by providing better information to market participants. For instance,
information and media networks can improve the productivity of the agricultural sec-
tor by providing market participants with timely information on weather and market
conditions [ 27,37,41]. The weather forecast information can help farmers optimally
plan their production, resulting in a higher level of production. Also, the price and
demand information from the Internet can allow agricultural market participants to
reduce the risk from price dispersion [ 30] and enter the most profitable markets [ 2].
These results are financial sustainability for participants who use the Internet.
2.2 Empirical Studies on the Impact of ICTs on Employment
There are several empirical studies on the impact of the Internet on employment and
employment structure in the labor market of different countries. However, the results
are still controversial. Stevenson [ 60] studies the impact of Internet access on worker
flows and job matching in different states across the US. It is found that people who
use the Internet have a better chance to change jobs, receive higher wages in new
jobs, and are less likely to become unemployed. Similarly, Kuhn and Mansour’s [ 38]
fixed-effects model indicates that the Internet decreased the unemployment duration
in the United States in 2008 and 2009. The study shows the various impacts of using
the Internet to seek jobs through different channels such as contacting relatives and
friends; advertisements; sending resumes or job applications, etc. Specifically, using
the Internet to contact friends or relatives increased the opportunity of finding a job
by 36%, while using the Internet to submit resumes does by 20%. Furthermore,
the Internet had no impact on wages. This means that the Internet helps find a new
job faster, but not necessarily a better job. Several other studies also concluded that
the Internet has a positive impact on employment, for example, Lehr et al. [ 42],
Crandall et al. [ 15], Kolko [ 35], Fabritz [ 19], and Bai [ 5]. However, some studies
point out that the benefits of the Internet in a job search are only limited to certain
research locations or subjects. For example, the studies of Kolko [ 35], Czernich [ 16],
or Ivus and Boland [ 29] do not find evidence of a positive impact of the Internet on
employment in general. But in terms of sector, the research results show a positive
effect on employment in the services sector and a negative in the manufacturing
sector. Forman et al. [ 21] find that the Internet has a positive impact on wage and
employment growth in certain counties of the United States. These counties are
characterized by high income, large populations, advanced skills, and concentrated
use of information and communication technology (ICT). Using 2000–2009 US
Census data, Dettling [ 17] claims that although using the Internet does not affect the
labor participation rate of single men and women, it increases the labor supply of
married women. And the effect is greater for married women with higher education
624 T. T. Vu et a l.
and children as the Internet encourages married women to participate in more flexible
jobs and save time in production at home.
3 Estimation Method
This research investigates the potential impact of the Internet usage on the probability
of self-employment in non-agricultural sector and on labor income.
Firstly, to examine the impact of Internet use on the probability of self-employment
in non-agricultural sector, this paper uses Eq. (3.1) with Internet use as the core
explaining variable. In addition, we add a series of control variables at individual-,
family-, and commune-level. Previous studies suggest individual and household fac-
tors affecting the probability of self-employment, including gender [ 43,56,63,69];
marital status, human capital, family size [ 4,63,69]; social capital [ 66,68]. Fur-
thermore, the model should include commune-level variables such as the distance
from the commune where the household resides to the nearest market, nearest bank
and nearest city. The regression model (3.1)isasfollows:
. Pr(Nonfarm_sel f employment =1)=β0+β1Education +β2Ethnic minority
+β3Male +β4Married +β5Age
+β6Age2+β7Associations +β8Hhsize
+β9Internet +β10Social capital
+β11Distance to bank
+β12Distance to city
+ui(3.1)
where the explained variable Nonfarm_selfemployment is dummy variable, taking 1
if the household head works in the non-farm self-employment sectors; the explana-
tory variables include: Male is 1 if the household head is male, Ethnic minority is 1 if
he/she is not Vietnamese or Chinese, Married is 1 if the household head is currently
living with his/her spouse, Age is the age of the household head, Associations is 1 if
the household head is a member of local associations, Internet is 1 if the household
head uses the Internet, Rural is 1 if household head resides in rural areas, Educa-
tion is the number years that household head spent at school, Hhsize is the number
of members in the household, Social capital is the annual cash gift expenditures of
household, Distance to bank is the distance from the commune where the household
resides to the nearest bank, Distance to city is the distance from the commune where
the household resides to the nearest city.
To investigate the effect of Internet usage on labor income, we employ the wage
equation (3.2), in which, the explained variable Hourly_wage is the hourly wage
which is measured by the sum of annual salaries/wages, bonus, uniforms, lunch,
allowances, sickness, pregnancy from their main job divided by the number of work-
The Impact of Internet Usage on the Labor Market in Vietnam 625
ing hours per year for this job. Using hourly wage as the explained variable can
eliminate the influence of working hours on wages [ 58]. In addition, the impacts
of Internet usage on wages are heterogeneous [ 31,58,69]. Therefore, to take into
account the heterogeneity across gender and place of household residence (urban or
rural areas), we add interaction terms with Internet, including Internet .×male and
Internet .×rural
The regression model (3.2)isasfollows:
. ln(Hourly_wage)=α0+α1Education +α2Ethnic minority +α3Male
+α4Married +α5Age +α6Age2
+α7Associations +β8Hhsize +β9Internet
+β10Rural +β11Internet ×male
+β12Internet ×rural +εi(3.2)
4 Data Description and Empirical Results
In this study, we use the Vietnam Household Living Standards Survey (VHLSS)
which was conducted in 2018 by the General Statistics Office (GSO). It covers
the whole country with all 63 provinces and centrally-governed cities. Informa-
tion was collected through face-to-face interviews with household heads, household
members and key officials at the commune level. In terms of data on households
and individuals, next to some information about basic demographic characteris-
tics, education, health and health care, VHLSS provides detailed information about
income and labor-employment. In particular, in this topic, information is available
on waged/salaried employment, self-employment in farm and nonfarm activities; the
most time-consuming (main) employment; the second most time-consuming (sup-
plementary) employment and other salaried/waged jobs.
Table 1 compares paid income by employment sector and the Internet usage.
It shows that income in households whose heads work in the non-farm sector is
much higher than that in the farming sector. In particular, the average income per
capita of households that work in the non-farm sector is VND 49.86 million, 5.6
Table 1 Average annual income from working by employment sector and internet access (VND
mil)
Internet access
No Yes
22.25 41.64
Employment in non-farm sector 49.86 41.88 55.80
Employment in farming sector 8.86 8.44 10.03
626 T. T. Vu et a l.
Table 2 Descriptive statistics of the sample
Vari abl e Mean Std. dev. Min Max
Male 0.79 0.41 0 1
Ethnic minority 0.20 0.40 0 1
Number of schooling years (education) 8.12 4.09 022
Age 46.39 8.78 16 60
Married 0.86 0.35 0 1
Rural areas 0.71 0.45 0 1
Household size 3.88 1.50 117
Internet access 0.45 0.50 0 1
Internet expenditure (VND mil) 0.79 1.05 013.2
Employment 0.95 0.23 0 1
Annual income from work (VND mil) 30.91 47.30 0898
Salaried/waged employment 0.49 0.50 0 1
Farming self-employment 0.54 0.49 0 1
Non-farm self employment 0.23 0.42 0 1
Second job 0.46 0.50 0 1
Third jobs (from the third job onwards) 0.04 0.20 0 1
times as much as that of VND 8.86 million for those who work in the agriculture
sector. Households that use the Internet enjoy earnings of VND 41.64 million, nearly
doubling their counterparts. This stereotype holds consistently when the employment
sector and Internet access are considered jointly. In both cases, earnings in households
which work in non-farm sectors are five times higher than who work in farming
sectors.
Table 2 provides descriptive statistics of our sample. The percentage of Internet
usage is 45% and the average cost of installation, subscription, and access to the
Internet is VND 0.79 million. Ninety-five percent of the population have jobs, of
which 54% of the household heads are self-employed in agriculture, forestry, or
aquaculture; 49% work to get salaries or wages, and only 23% are self-engaged in
production, business, or services outside agriculture, forestry, and aquaculture. The
percentage of household heads working in the second job and third job or more
are 46% and only 5%, respectively. The average annual income that they receive
from their work is VND 30.91 million. Seventy-one percent of households reside in
rural areas. Related to the level of education of household heads, on average, they
spend 8.12 years at school, approximately 14% of them have no qualification, 106
household heads have master’s degrees, and 15 have doctoral degrees. Seventy-nine
percent of households are headed by males, 86% of heads are living with their spouses
and one-fifth of them belong to ethnic minority groups. The average household size
is 3.88 members.
We estimate Eqs. (3.1) and (3.2) by using Bayesian regression via the Random-
walk Metropolis Hastings (MH) Markov chain Monte Carlo (MCMC) method.
The Impact of Internet Usage on the Labor Market in Vietnam 627
Table 3 Bayesian estimation results of Eq. (3.1)
Pr(Nonfarm_selfemployment=1) Mean Std. dev. MCSE Median Equal-tailed dy/dx
95%
Cred.
Interval
Education 0.0414 0.0004 0.0001 0.0415 0.0406 0.0419 0.0067
Ethnic minority . −0.6743 0.0007 0.0002 . −0.6744 . −0.6754 . −0.6729 . −0.0878
Age 0.2052 0.0007 0.0002 0.2053 0.2037 0.2066 0.0102
Age.2. −0.0024 0.0000 3.8.×10−6. −0.0024 . −0.0025 . −0.0024 . −0.0004
Male . −0.4811 0.0002 0.0001 . −0.4811 . −0.4815 . −0.4808 . −0.0837
Married 0.1749 0.0003 0.0001 0.1749 0.1743 0.1755 0.0270
Local association membership . −0.2741 0.0003 0.0001 . −0.2741 . −0.2748 . −0.2736 . −0.0434
Household size 0.0108 0.0003 0.0001 0.0108 0.0102 0.0113 0.0017
Internet access 0.7210 0.0005 0.0001 0.7211 0.7201 0.7218 0.1183
Social capital (VND mil) 7.8.×10−62.2.×10−6.8.2×
10−8.7.6×
10−6.3.6×
10−60.0000 0.0013
Distance to bank (km) . −0.0054 0.0002 0.0001 . −0.0055 . −0.0058 . −0.0050 . −0.0009
Distance to city (km) . −0.0005 0.0002 .5.3×
10−6. −0.0005 . −0.0008 . −0.0002 . −0.0001
Acceptance rate 0.1707
Number of observations 16,380
Notes Coefficients for the constant are not reported
Bayesian analysis assumes all model parameters are random quantities and there-
fore can combine prior information with evidence form the observed data which is
completely opposite to the traditional frequentist methodology where all parameters
are considered unknown but fixed quantities [ 70]. For convenience, Bayes provides
default priors for model parameters, i.e., the normal priors with zero mean and vari-
ance of 10,000 for the regression coefficients. The first 2500 burn-in iterations are
discarded and the subsequent 10,000 MCMC iterations are used to produce the results
that are presented in Tables 3 and 4. The first column and the second column indicate
the posterior mean estimate and the estimated posterior standard deviation respec-
tively, the third column presents the Monte Carlo standard error (MCSE) measuring
the accuracy of simulation results, the fourth column shows the posterior median
estimate, and the last two columns indicate the 95% equal-tailed credible interval.
The results show that the higher education level increases the probability of being
self-employed in non-farm sector. Each additional year spent in school by head would
increase the probability of being in non-farm self-employment sector by 0.7%. This
result is in line with the studies of Kidd [ 33] and Do and Duchene [ 61]. One of the
major determinants of allocation across employment categories is Internet usage. In
particular, households having Internet connection are more likely to work in non-
farm self-employment. The results indicate that the probability of self-employment
in non-farm sector increases by 11.8% if a household head having access to the
Internet, compared to others who do not use, other things being held constant. An
ethnic minority head has a lower propensity of being in self employment in non-farm
activities by 8.8% than that of a Vietnamese or Chinese family. The probability of
628 T. T. Vu et a l.
Table 4 Bayesian estimation results of Eq. (3.2)
Ln (Hourly_wage) Mean Std. dev. MCSE Median Equal-tailed
95% Cred. Interval
Education 0.0881 0.0025 0.0002 0.0882 0.0831 0.0929
Ethnic minority . −0.5193 0.0149 0.0021 . −0.5197 . −0.5488 . −0.4900
Age 0.0764 0.0027 0.0002 0.0764 0.0711 0.0816
Age.2. −0.0013 0.0000 .2.8×10−6. −0.0013 . −0.0013 . −0.0012
Married . −0.1471 0.0243 0.0030 . −0.1464 . −0.1948 . −0.1001
Local association
membership
. −0.0488 0.0117 0.0014 . −0.0483 . −0.0719 . −0.0262
Household size . −0.0595 0.0069 0.0004 . −0.0595 . −0.0726 . −0.0459
Internet access 0.0434 0.0150 0.0029 0.0424 0.0160 0.0753
Male 0.2727 0.0138 0.0022 0.2732 0.2455 0.2996
Rural areas . −0.3610 0.0240 0.0028 . −0.3607 . −0.4074 . −0.3155
Internet.×male 0.0324 0.0094 0.0016 0.0325 0.0131 0.0500
Internet.×rural . −0.0835 0.0101 0.0023 . −0.0838 . −0.1024 . −0.0634
.σ22.6288 0.0223 0.0005 2.6294 2.5844 2.6718
Acceptance rate 0.3698
Number of observations 25,229
Notes Coefficients for the constant are not reported
being self-employed in non-farm sector would decrease by nearly 8.4% if households
are headed by male, and by 4.3% if the head is a membership of local associations.
The relationship between age and the probability of self-employment in non-farm
sector follows an inverse U-shaped curve. As the number of persons in a household
rises by one, the probability of being in non-farm self-employment increases by
0.2%. The head who is living with his/her spouse would increase the propensity of
being in self employment in non-farm activities by 2.7%. Distance from the village
center where the household resides to the nearest bank and nearest city is negatively
correlated with the probability of working in the non-farm sector. The further the
distance, the lower is the propensity for household heads to access to non-farm
employment sector. Table 3 shows that there is a decrease of 0.4% in the propensity
of being in non-farm activities for heads when the distance to nearest bank increases
1 km, other things being fixed. This is also explained by the fact that engagement
in production, business, services outside agriculture, forestry, aquaculture requires a
large amount of payment transactions. Therefore, the farther the distance from village
center to nearest banks, the higher are transportation costs restricting entry into non-
farm employment sector. In developing countries, social capital or social networking
is one of the most major factors to facilitate the production and business activities,
in which social capital is measured by the annual cash gift expenditures for special
events such as a wedding or a funeral of a household [ 69]. In this study, social capital
is monetary value of gift, donation, assistance, tributes, and contributions to death
anniversaries, etc. to other households. The results imply that social capital increases
the probability of being in non-farm employment which is consistent with Westlund
The Impact of Internet Usage on the Labor Market in Vietnam 629
and Bolton [ 65], Zhang and Li [ 68]. In particular, an annual cash gift expenditure
increase of VND 1 million leads to an increase in the probability of being in non-farm
self-employment by 0.1%.
According to the results in Table 4, education is one of the major determinants
of earnings. The higher the level of education obtained, the higher is the paid wage,
which is in line with human capital theory [ 12]. In particular, each additional year
spent in school by head would increase their hourly wage by 9.2%. The results
reveal significant positive associations between Internet access and earnings. House-
hold heads using the Internet would increase their hourly wage by 4.4%. An ethnic
minority head has hourly wage equal to 59.5% of that of a Vietnamese or Chinese
head. Regarding gender characteristics, earnings in male-headed household tend to
be higher than in female-headed one which can be attributed to the fact that male
labors have to bear greater family financial responsibilities. This is consistent with
the finding of Si and Li [ 58]. Other things held constant, the hourly wage received
by a male-headed household is 31.4% higher than that of a female-headed house-
hold. The coefficients of age and quadratic term of age suggest an inverse U-shape
relationship between earnings and age. Earnings tend to rise with the age of house-
hold heads and reach their peak when heads are 31 years old, then diminishes when
their age increase. Hourly wage decreases by 13.7% if the head is living with his/her
spouse, and by 30.3% if the household dwells in rural areas. As the number of per-
sons in a household rises by one, the hourly wage decreases by 5.8%. In addition, the
participation in local associations is negatively correlated with the earnings of the
household head. Membership of local associations would decrease his/her hourly
wage by 4.8%. On the contrary, Si and Li [ 58] find the positive impact of union
membership on wage levels. This result seems to suggest that the government should
consider ways to upgrade the capabilities of local associations which are expected
to play an important role in improving workers’ negotiation capacity and protecting
effectively their legal rights and interests. Moreover, to investigate the heteroge-
neous impact of Internet usage on non-farm self-employment across gender and area
characteristics, we add interaction variables, including Internet .×male and Internet
.×rural. Internet usage is found to have more significant impact on earnings for
male-headed households and dwelling in urban areas.
5 Conclusions
The paper investigates the impact of Internet usage on the probability of self-
employment in non-agricultural sector and labor income. We use the random walk
Metropolis-Hastings Markov chain Monte Carlo method with data from the Viet-
namese Household Living Standard Survey in 2018. The results show that the rapid
development of the Internet has a huge impact on the labor market. It seems that
Internet usage increase the probability of working in non-farm self-employment
sector by 11.8%. In addition, household characteristics are important determinants
of propensity to become self-employed in non-agricultural sector. This paper also
630 T. T. Vu et a l.
indicates that education plays an important role in improving labor earnings. Mem-
bership in local associations would decrease the probability of self-employment in
non-agricultural sector and labor income. Interestingly, the heterogeneous analysis
points out that Internet usage has a significant impact on male and rural areas. Based
on the research results, this paper proposes that the government should promote
the construction of the Internet infrastructure to make the Internet more affordable
and more accessible to households, especially in rural areas. Furthermore, govern-
ment must promote the circulation of labor market information via the Internet and
enhance the connection between supply and demand in the labor market. In addition,
comprehensive evaluation indicators on the performance of local associations should
be constructed to improve their efficiency.
Acknowledgements Thuong Thi Vu acknowledges financial support from Vingroup Innovation
Foundation (VinIF), Master’s and Doctoral (Ph.D.) Scholarship. The authors are very grateful to
anonymous referees for their valuable comments.
Thang Tat Vo acknowledges the University of Economics University of Economics Ho Chi Minh
City, Vietnam for the journal submission support.
Conflict of interest The authors declare that they have no conflict of interest.
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