The effect of input-trade liberalisation on farm and non-farm labour in Vietnam

Abstract

We assessed the impact of trade liberalisation-induced variation on the price of chemical fertilisers on farm and non-farm labour in rural Vietnam. Building on a non-separable agricultural framework, some theoretically based hypotheses are tested through a panel estimation. The estimations control for household fixed effects and possible selection bias linked to labour market regimes. We found that the liberalisation increased rural household participation into farm employment while non-farm participation was generally unaffected. Nevertheless, we also found that the liberalisation in the rice sector had a compensating effect. Some heterogeneous impacts related to the various labour market regimes were also found.