Beyond the Scars

<p class="ql-align-justify">The COVID-19 pandemic caused unprecedented labor market disruptions worldwide, with young workers expected to suffer long-term economic scarring due to job instability and a lack of experience. However, empirical evidence on income recovery among youth in developing countries, particularly in Vietnam, remains scarce. This study addresses this gap by examining whether young Vietnamese workers have experienced lasting income scars or achieved a resilient recovery after the pandemic. Using nationally representative data from the Vietnam Labour Force Survey (LFS) for 2019 and 2022, the study applies a difference-in-differences (DiD) approach to estimate the causal effect of the pandemic and recovery policies on income disparities between young workers (aged 15–24) and prime-age workers (aged 25–54). The findings reveal no persistent economic scarring among young workers. On the contrary, youth income increased by approximately 5%–7% compared to older cohorts after the pandemic. The recovery is heterogeneous: female youth experienced stronger gains (7.9% vs. 2.6% for males), rural youth recovered faster than urban youth, and workers with vocational or intermediate education achieved the highest income growth. These results highlight the effectiveness of Vietnam’s post-pandemic recovery programs, including vocational training, employment subsidies, and digital skills initiatives, in fostering youth resilience. The study concludes that young Vietnamese workers have not only overcome the short-term income losses from COVID-19 but have also become key drivers of inclusive and sustainable recovery in the post-pandemic economy.</p>