This study examines the wage differentials between migrant and non-migrant workers. Based on data from Vietnam Migration Survey in 2004, earnings equations with and without Instrumental Variable (IV) are estimated for migrant workers and non-migrant workers. From these results, the study compares the wage structure for migrant workers and non-migrant workers. Oaxaca decomposition of the wage differentials of the two groups workers are carried out. | Researches & discussions This study examines the wage differentials between migrant and non-migrant workers. Based on data from Vietnam Migration Survey in 2004, earnings equations with and without Instrumental Variable (IV) are estimated for migrant workers and non-migrant workers. From these results, the study compares the wage structure for migrant workers and non-migrant workers. Oaxaca decomposition of the wage differentials of the two groups workers are carried out. Results, which are controlled for observed characteristics and selection bias, indicate some main points. The wage differentials between non-migrant and migrant workers are mostly due to the difference in structural factors. Besides, there are differences in endowment factors. Keywords: migration, education, worker’s earnings, income gap 1. Introduction since the year of 1986, Vietnam has gone through a process of Ñoåi Môùi toward a market– oriented economy. Besides, it is widely recognized that urbanization is inevitable and that population movements are integral features of the process of growth, which makes many changes in Vietnamese labor market. one of the remarkable changes is the increasing participation of migrants in local labor force. in fact, migration is an inevitable result of development because Vietnam has been developing fast after reforms in the late 1980. Therefore, the increasing migration level is not surprised. The increasing portion of migration moves primarily to the urban areas, especially big cities as hcMc and haø noäi, and adjacent industrial zones to these cities such as Bình Döông and Ñoàng nai industrial parks. Like many other cities and industrial zones, migration also causes the earnings differentials. * University of Economics - HCMC an earnings gap can be observed between migrants and non–migrants. Therefore, there are several considerations to examine wage differentials among labors, especially between migrants and non–migrants. Lower returns to migrants .
