Employment and income of workers in foreign direct investment enterprises in Ho Chi Minh City

Abstract

This paper finds that foreign direct investment enterprises (FDIE) contributes the greatest share to GRDP and creates more employment compared with other sectors in HCMC. FDIE also have a higher capital deficit than domestic enterprises, therefore the average income of workers in this sector is significantly higher than that of state-owned and private ones. Within FDIE in HCMC, average income of workers in enterprises with import-export activities was lower than in those without import-export activities in 2011 – 2013. However, the gap was gradually shortened and the opposite is true since 2014. This change is the result of the shift in export commodity structure and from labor-intensive industries to technology- and high skillintensive industries, thereby enhancing the worker income. From the analysis, the paper offers some policy suggestions for the HCMC government in order to boost foreign direct investment attraction in capital- and technology-intensive industries which helps to create more employment of high productivity and increase worker income.