1.

LABOR SUPPLY
Table 1: Vietnam's labor force
avg. 1996-2007 annual
1996 2007
growth rate
Population aged 15 and
above
total 47,620,139 63,305,882 3.0%
urban 11,026,793 17,964,868 5.7%
rural 36,593,346 45,341,014 2.2%
male 22,391,531 30,424,965 3.3%
female 25,228,608 32,880,917 2.8%
Labor force
total 36,082,273 47,144,091 2.8%
urban 7,243,053 11,895,757 5.8%
rural 28,839,219 35,248,334 2.0%
Source: Author’s calculation using Labor Force Survey data
Note: Labor force includes employed and unemployed workers

Table 2: Education structure of working age population

1993 1998 2002 2004 2006
No degree & primary school 49% 65% 51% 46% 44%
Lower secondary school 26% 23% 30% 33% 33%
Upper secondary school 14% 10% 16% 17% 19%
Junior College and above 1.8% 2.5% 3.3% 4.0% 4.2%
Source: Author’s calculation using VLSS and VHLSS

- Vietnam has an abundant and growing labor force (table 1).

+ Each year, there are about one million new entrants to the labor market, so the pressure to
creating new jobs is high (table 1 and 2).
+ The skill level is low, albeit increasing. More than 40% of the Vietnamese labor force is
unskilled (primary school degree or no degree at all)
- From 1993 to 2006, the proportion of unskilled workers decreased by only 5%, from 49% to
44%. Most of this decrease in unskilled workers was replaced by semi-skilled workers (lower
or upper secondary school degrees).
+ The proportion of high-skilled workers (college degree and above) increased from 1.8% in
1993 to 4.2% 2006. Despite this 100% increase in 13 years, 4.2% is still very low, too slow
to catch up with other countries in the region, which partly explains Vietnam’s low labor
productivity
 2. LABOR PRODUCTIVITY
- Labor productivity, defined as GDP per worker, has been increasing in Vietnam at a rate of
about 5% per year.
+The growth rate of Vietnam’s labor productivity is relatively high compared with other
ASEAN economies, but certainly behind that of China.
+Despite a relatively high growth rate, labor productivity is still very low in Vietnam,
because it started from a very low base.
- As of 2006, Vietnam’s labor productivity is only about half of China’s level, and about one
third of other ASEAN countries.
+Vietnam still has a very large gap to fill regarding its labor productivity.

Macrothink.org. (2019).
http://www.macrothink.org/journal/index.php/ijld/article/doad/10577/9020.