Abstract
This study examines the impact of minimum wages in Viet Nam using recent data from LabourForce Surveys 2012-20. Findings reveal a positive effect of minimum wage increases on monthly wages of wage workers who earn below minimum wages. A one per cent increase in the minimum wage increases monthly wages by 0.83 per cent. Higher minimum wages are translated into wages of low-wage workers. For the whole sample of workers, the study does not find significant effects of minimum wage increases on overall employment and monthly wages.However, the study finds a negative and considerable effect on the amount of working hours.Working hours per week are reduced by 0.38 per cent for a one per cent increase in the minimum wage. Since total wages are unchanged, a reduction in working hours results in an increase inhourly income. A one per cent increase in the minimum wage leads to a 0.32 per cent increase in hourly wages. It suggests that, rather than lowering the number of workers, employers may respondto minimum wage increases by reducing workers' working hours. It indicates that a positive effect of minimum wage increases on labour productivity. The research also shows that the COVID-19 epidemic has a negative impact on low-wage workers. Despite a 1.3 per cent fall in real monthly pay for wage workers in 2020, the proportion of workers receiving less than minimum wages climbed 2.8 percentage points (or 56 per cent) from 5.0 per cent in 2019 to 7.8 per cent in 2020.