How Do Positive and Negative Shocks Jointly Shape Educational and Labor Market Outcomes? The Case of Education Reforms in Vietnam

Current research on education reform has focused chiefly on positive shocks that intend to equalize educational opportunity, while negative shocks that impede school access have rarely been investigated. What would happen to someone exposed simultaneously to both types of shocks? I tackle this question in the context of Vietnam, where a universal primary education reform (a positive shock) and an introduction of tuition fee for secondary education (a negative shock) took place within a short time but affected different cohorts. Analyses of census data suggest four key findings. (1) The negative shock decreased individual years of schooling, whereas the positive shock increased it. (2) The beneficial effect of the positive shock predominates over the adverse effect of the negative shock, resulting in an overall improvement in educational attainment for those exposed to both shocks. (3) The favorable joint effect on schooling is more pronounced for socioeconomically disadvantaged rural residents, women, and ethnic minorities. (4) The two shocks together enhanced intergenerational educational persistence, but their effects on labor market outcomes are complex.