Using both industry and firm level data sets during the period 2003-2008, this
paper provides the first comprehensive investigation of the impact of trade liberalization on
employment and wages in Vietnamese manufacturing. Overall, we find empirical evidence that
trade liberalization has a negative effect on employment and wages. However, the impact
magnitude is modest with a decline within 2.4%-3.5% in real wages and 0.76% and 0.17%
reductions in industry and firm employment respectively on average over the period. We
further investigate the effects of trade liberalization on gender and skill earning gaps and the
role of trade unions by location. The analysis shows that trade liberalization appears to reduce
the gender and skill earnings differentials.