Informal sector, employment for rural workers, and the process of economic integration: the case of the Red River Delta (Vietnam).

Summary This thesis aims to examine the characteristics of the informal economy (informal sector and employment) and its role in generating employment and income for rural workers. The focus is on the case of the Red River Delta (RRD), Vietnam's most populous region, in the context of the country's economic integration process. Unlike most existing studies, we examine the informal economy not only in urban areas, but also in rural areas, with the comparison between the two being the focus of the thesis. After a review of the literature on the subject in developing countries, countries in transition and Vietnam, an empirical analysis of the characteristics and dynamics of the informal sector in rural and urban areas in the DFR is proposed from two angles, macro and micro. During the period of economic integration, we find that this region is marked by the most considerable changes in the labor market, with a decline in the share of agricultural employment, which is accompanied by a significant increase in employment in non-farm family enterprises, particularly in the informal sector. The comparative analysis of the informal sector between rural and urban areas shows that the informal sector is not only the urban phenomenon long emphasized by researchers. It is also crucial in rural areas, especially in the particular DFR region. The role of the informal economy in generating employment and income for rural workers is studied along two lines: first, through analyses aimed at highlighting the earnings differentials between agricultural and non-agricultural informal jobs; and second, through the study of the determinants of sectoral allocation (formal/informal) and income of rural migrants in the urban labor market. These questions are addressed by mobilizing different individual databases (notably panel data). The results show that rural workers can earn more when they engage in non-agricultural activities instead of only in agriculture, but this is not always true for all types of non-agricultural jobs. In many cases, non-farm jobs (such as informal wage jobs and even formal wage jobs in the upper income quintiles) do not pay as well as the equivalent farm jobs. Women always earn less when they have non-farm jobs, especially when they are informally employed. When migrating to urban areas, rural workers engage primarily in informal employment. Being an informal worker in the city is significantly correlated with the intention to look for another job, indicating a form of dissatisfaction with the type of employment. Furthermore, the results of the earnings equations suggest a general disadvantage to informal workers in the urban labor market in the LLDC provinces, regardless of their migration status. However, among all workers who migrate to urban centers, informal workers from rural areas suffer the worst working conditions.