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.
Bibliographical noteFunding Information: This research work was carried out with financial and scientific support from the Partnership for Economic Policy (PEP) (www.pep-net.org) with funding from the Department for International Development (DFID) of the United Kingdom (or UK Aid), and the Government of Canada through the International Development Research Center (IDRC). The authors are also grateful to Nguyen D. Hung and Dong T. T. Linh for their excellent contribution in the previous stages of this work, as well as the participants to the PEP meetings in Santa Cruz (Bolivia) in May 2014 and in Nairobi (Kenya) in May 2015 (in particular to Agnès Zabsonré), the participants of the Eighth Vietnam Economists Annual Meeting 2015 in Thai Nguyen City (Vietnam), the participants of the Third China Meeting of the Econometric Society in June 2016, and three anonymous referees for excellent comments. Jorge Davalos acknowledges the support of the R4D project on Employment funded by the Swiss National Science Foundation and the Swiss Development Cooperation.
- agricultural household model
- chemical fertilisers' trade liberalisation
- farm and non-farm employment
- multinomial Tobit
- rural Vietnam