Research

Abstract:  This paper investigates the impacts of minimum wage policies in developing countries with a high share of people working in the informal sector, which is not covered by labor regulations. I exploit the 2008 introduction of regional variation in minimum wage levels in Vietnam and use individual-level survey data from 2004 to 2014 to examine the effects on employees in the formal and informal sectors. Using an event study design, this paper reveals a significant increase in labor force participation four years after an increase in the minimum wage, mainly driven by increased in informal employment. However, I observe negative short-run effects on formal sector employment, and fewer working hours in workers' primary jobs. I also find an increased likelihood of formal workers having informal secondary jobs. However, I do not observe any consistent reallocation of workers between formal and informal sectors across sectors and in and out of the workforce. 

Abstract: Many countries set wage floors by occupation for both low- and high-skill workers. Changes in these wage floors can induce wage compression within firms and reduce the skill premium. We examine the effects of this institution in the Tunisian banking sector, where a 2014 national collective bargaining agreement resulted in wage compression in some branches. We find modest overall employment effects masking substantial heterogeneity by age and skill level. Hires of young workers increase. High-skill young workers separate and move to banks with higher skill premia, suggesting they quit. Survey results confirm that young high-skill workers are more sensitive to wage compression. We interpret our results through a model of monopsony with binding wage floors and relative-wage concerns. Our results highlight a novel channel through which wage floors shape labor market dynamics.

Abstract: This paper examines the impact of Vietnam’s 2012 minimum wage unification, which raised the minimum wage for domestic firms to match that of foreign-invested (FDI) enterprises. Using firm-level panel data and a difference-in-differences approach, we document a sizable relative employment increase in foreign firms compared to domestic firms of approximately 28 percent, with stronger effects in manufacturing. Event-study estimates indicate no differential pre-trends and show that these relative effects persist over time. Importantly, further analysis reveals that the estimated relative employment effects are driven primarily by a contraction in domestic firm employment following the reform, while employment in foreign firms remains largely unchanged. At the district level, minimum wage increases do not significantly affect overall employment; however, districts with a higher presence of foreign firms experience more favorable employment dynamics. Overall, the findings suggest that the standardization of labor regulations across domestic and foreign firms reshapes employment patterns without leading to aggregate employment losses.

Abstract: How does an episode of forced displacement affect the subjective well-being of victims upon their return? To answer this question, we study the week-long inter-ethnic conflict that occurred in southern Kyrgyzstan in June 2010, using individual survey data for 2006–2019. Our baseline analysis compares conflict-affected displaced individuals with unaffected individuals while controlling for observable characteristics. To address the potential endogeneity of displacement, we complement these estimates with an instrumental-variables strategy based on household-level geographic features, including proximity to conflict-related destruction and the availability of nearby locations suitable for temporary hiding. We also use a difference-in-differences design to trace changes in local subjective well-being over time.

Our results show that even short-term displacement is associated with a substantial decline in post-conflict subjective well-being, but only among members of the targeted ethnicity. This negative effect is attenuated among individuals who received support from family and friends during displacement. The effects also vary markedly across dimensions of subjective well-being, with the strongest negative impacts observed for satisfaction with dwelling, health, security, and future prospects. Although the subjective well-being of displaced individuals gradually converges toward that of non-displaced individuals, recovery is slow and takes several years.\footnote{Corresponding author: azizbek.tokhirov@cerge-ei.cz. We are grateful to Michal Bauer, Ruben Enikolopov, Štěpán Jurajda, Vasily Korovkin, Andreas Menzel, Dávid Krisztián Nagy, Christian Ochsner, Sebastian Ottinger, and the participants of presentations at CERGE-EI and UPF for their helpful comments and discussions, and to Andrea Downing and Gray Krueger for editing. Azizbek Tokhirov acknowledges financial support from the Czech Ministry of Education, Youth, and Sports (ERC CZ program, LL2303). The authors have no relevant financial or non-financial interests to disclose.}

This study examines the impact of Vietnamese immigrant labor supply shocks on wages in the U.S. Gulf of Mexico shrimp fishery from 1979 to 1990. Leveraging the post-Vietnam War immigration wave as a natural experiment, it compares shrimp catch-per-day-fishing in Texas and Louisiana (treatment) to Florida (control), where fewer Vietnamese settled. Using species-specific shrimp catch data (brown, white, pink) aligned with state fishing patterns, a difference-in-differences analysis reveals a significant but temporary 30–50% decline in real wages within the shrimp fishery during the initial years of the immigrant influx.