Returns to Higher Education in Vietnam: Evidence from Employment Outcomes

This thesis aims to identify a causal relationship between higher education and labour market outcomes by leveraging the 2001 Vietnam Higher Education Reform as an exogenous variation in education to construct an instrumental variable. Based on a large dataset from the Vietnam Housing Census 2019, I find that there is a significant positive relationship between tertiary schooling and employment results, such as occupation skill, job stability, and household wealth. Furthermore, female postsecondary schooling has particularly higher returns than male, and tertiary schooling provides much higher premiums with regard to those who only finish high school. Heterogeneity tests suggest that higher education helps improve skills for all, signals ability for females, and allows them to self-select into jobs of their preferences. These findings provide critical recommendations for policymakers on the significance of promoting higher education for upper secondary school graduates and pushing for greater equal access to higher education.