Economic restructuring and employment in Vietnam: A panel Granger causality approach

Abstract

Economic restructuring is an objective process that alters structure, density, speed and quality of economic relations between sectors and regions to achieve a more reasonable structure for the social and economic development of a country. This process can be very diverse, as sometimes it is not in accordance with rules, thus the results of economic restructuring may depend on subjective or objective factors. Vietnam is a country with an abundant labor force, thus economic restructuring towards creating more jobs for workers is considered a key task of its today's economy. Through the statistical data on the structure of economic sectors and employment in 56 provinces and cities across the country in the period of 1998-2017, combined with the use of Granger causality method, the article examines the relationship between economic restructuring and employment in Vietnam. The research results show that economic restructuring has a positive impact on employment, but there is no statistical evidence for the effect of employment on economic restructuring. The research results are consistent with the reality of economic restructuring and job growth in Vietnam, because when the structure of the economic sector changes suit the development of the world, the labor market in Vietnam also changes to meet the changing needs of the economy.