Trade Liberalization and Children's School-Work Choice: Evidence from Vietnam

Abstract

This thesis examines the impact of trade liberalization on the school-work choices among Vietnamese children from 2002 to 2016 by exploiting the regional variation in tariff reduction exposure. Using eight waves of the Vietnam Household Living Standard Surveys and the U.S-Vietnam Bilateral Trade Agreement (BTA) in 2001 as an export shock, I found that children living in provinces with higher exposure to the BTA tariff reduction were more likely to drop out of school and this adverse impact of BTA shock persisted over medium-run. This outcome is driven by a rise in labor incidence in market work, suggesting a trade-induced increase in an opportunity cost of schooling which deters the process of human capital accumulation.