Foreign investment and female employment in Viet Nam

This paper investigates how the interplay between foreign direct investment (FDI) and the availability of technology affects labour market outcomes for women in Viet Nam. Using household surveys, we explore the relationship between industrial exposure to FDI, access to technology, and employment and wages. We find that FDI is associated with increases in employment and wages by more in hightechnology areas of the country. In areas of the country with weak technology, foreign investment is associated with lower employment and lower wages, particularly for men. Together, these results highlight the importance of absorptive capacity; that is, to truly benefit from foreign investment, the domestic economy needs a sound education system and established technology. We also find that an equal increase in foreign investment in high-tech provinces is associated with larger increases in top wages for men than for women. In general, these results suggest that foreign investment may be associated with a rising gender wage gap at the high end of the wage distribution.