DIGITAL ECONOMY AND LABOR MARKET DYNAMICS: A COMPARATIVE ANALYSIS OF EMPLOYMENT TRENDS IN VIETNAM AND THAILAND

This study examines the causal impact of digital transformation on labor market dynamics in Vietnam and Thailand between 2015 and 2023. Using a matched firm-level panel and a robust propensity score matching with a difference-in-differences approach, the analysis reveals that digital adoption induces significant structural shifts in employment, amplifies wage polarization, and intensifies demand for digital skills. Vietnam, with its manufacturing-driven economy, experiences substantial job displacement (–8%) and modest high-skilled wage gains (+18%), while Thailand’s service-oriented economy fosters smoother labor reallocation and stronger wage growth for skilled labor (+22%). Digital skill demand rises notably in both countries (+25% in Vietnam, +30% in Thailand), reflecting evolving occupational requirements. Robustness checks, including placebo tests, alternative matching techniques, and triple differences, confirm the consistency of these findings. The study advances theoretical understanding by integrating the resource-based view and labor market segmentation theory to explain how digital capabilities and labor structures mediate these outcomes. Policy implications emphasize targeted upskilling, small and medium enterprise digitalization, and rural infrastructure investment to ensure inclusive growth. By offering empirical evidence from under-researched emerging economies, this study contributes to the global discourse on equitable digital transitions and labor resilience in the digital age.