Boosting or Busting: The Impact of Industrial Zones on Local Income Dynamics and Labor Outcomes in Vietnam

This paper investigates the empirical relationship between the establishment of industrial zones and labor outcomes in Vietnam, focusing on variables such as local income inequality, levels of household annual income and expenditure per capita, hourly wages, and share of labor income. Using commune-level panel data constructed from Vietnam's national household survey dataset and a staggered event estimation strategy, the establishment of IZs leads to an increase in individual wage inequality, especially for women; a slight increase in hourly wages and share of labor income, but a decrease in expenditure per capita and rising house value. Policies ensuring fair wages and access to essential amenities, social safety net programs to assist vulnerable workers and reduce income disparities, and regulations to support female workers are recommended.