Returns to education and decent work across firm ownership types in Vietnam

This study examines the returns to education in Vietnam through the lens of decent work, investigating how these returns vary across different firm ownership types. Using data from the Vietnam Household Living Standards Survey (VHLSS) 2020 and employing the Heckman method, we analyze the impact of additional years of schooling on both wage and non-wage outcomes. Our findings reveal significant variations in returns to education across state-owned, private, foreign investment, and individual businesses. State-owned enterprises show the highest returns to education in terms of wages, while the state-owned and private sectors demonstrate the strongest links between education and decent work indicators such as social insurance, paid leave, and official contracts. Interestingly, foreign investment firms exhibit high wage returns but no significant effect of education on other decent work outcomes except for social insurance. These results highlight the complex interplay among education, institutional structures, and labor market dynamics in Vietnam’s transitioning economy. Our study contributes to the understanding of the returns to education and decent work in developing economies; it also provides insights for policymakers seeking to enhance the alignment between education and labor market needs across different sectors of the Vietnamese economy. • Returns to education for decent-work outcomes vary across firm-ownership types (VHLSS 2020). • State-owned enterprises show highest wage returns (9.8 %) but exclude workers with low education levels. • Foreign firms provide high baseline decent work conditions with minimal education-based differentiation. • Private firms demonstrate market-oriented formalization with moderate education returns across all indicators. • Elite capture in state sector raises equity concerns requiring targeted policy interventions.