An Examination on the Impact of FDI on Gender Wage Gap: Evidence from Micro Data in Vietnam

The role of FDI in bridging investment gaps, transferring technology, and enhancing employment opportunities is well acknowledged; however, its impact on social issues like the gender wage gap remains an area rife with complexities and contestations. This study used Recentered Influence Function (RIF) Regression and decomposition methods to examine the impact of FDI on the gender wage gap in the period 2010-2020 in Vietnam based on microdata from the Household Living Standards Survey (VHLSS). The RIF decomposition method has two strengths over previous methods: it allowed detailed decomposition to evaluate the contribution of each explanatory variable on the composite decomposition. It can extend the analysis to any statistic, such as quantiles, interquartile ranges or Gini. Findings revealed that FDI positively influences workers' incomes and effectively narrows the gender wage gap. However, the positive impact of FDI only occurred in low-wage quantiles (10, 25, and 50 per cent); at the highest percentile (90 per cent), the impact of FDI was negative.