The size of the labour force grew from about 39 million in 2000 to 47 million in 2008, or about one million per year. The non-wage informal sector absorbs the vast majority of total employment, and small and medium enterprises account for almost 80% of employment. The female participation rate is exceptionally high, with women making up 48% of the labour force. In fact, Vietnam ranked 11th out of 134 countries on female labour force participation in the 2009/10 Global Competitiveness Report. However, women tend to be concentrated in certain sectors and occupations, to be less qualified than men and earn 34% less on average.

The rate of unemployment is relatively low, averaging about 5% in 2007, with slightly higher unemployment rates in rural areas. In the last five years the urban unemployment rate has declined from 5.3% to 4.6%.

Major shifts are occurring in the composition of the labour force by economic sector. The share of the labour force in the agriculture sector decreased from 69% in 1997 to 57% in 2005, and an estimated 50% in 2010.

This means that well over one million workers are shifting from agriculture to industry and services each year.  There were commensurate increases in industry, which accounted for 11% of the total in 1997, 18% in 2005 and about 23% in 2010; services also rose from 20% in 1997 to 24.5% in 2005 and 27% in 2010.

Labour Force Structure

Although the figures show a decline from 60% to 40% between 1998 and 2006, ‘farmer’ is still the single largest occupation in Vietnam.  During this time, the proportion employed by private enterprises increased substantially - to over one fifth of the total.

By employment status, the number of waged workers more than doubled during the period 1997 to 2007, increasing its share from about 19% to 30%. The majority of those employed, however, were own account workers (those who get their pay directly from their customers) whose share increased from 42% to 54%. The significant increase of waged and own account workers drastically reduced the share of unpaid family workers from 39% in 1997 to 13% in 2007, resulting in more cash income for those families. The entrepreneurial group, people who employ at least one paid worker in their business or trade, increased rapidly. They comprise a relatively small group, but their numbers have grown dramatically from around 50,000 in 1997 to almost 1.5 million in 2007.

Women in the Workforce

Women make up almost half the labour force in Vietnam, yet gender segregation occurs by occupation. Women and men do not participate in the labour market on equal terms. Gender disparities exist, linked to the sectors of work, economic activities, occupations, job positions and salaries. More women work in hotels and restaurants, education and training and health and social work. Meanwhile, more men work in transport and storage, construction, electricity, gas steam, water and air conditioning and mining. In industries where women predominate, they tend to work in unskilled positions, which are lower in rank and do not require physical strength and technical ability. As a result, female workers are paid lower salaries, work longer hours and have less access to training and promotions. On average, 22% of the economically active population has completed vocational training or graduated from university. Men tend to be more educated or skilled; 20% of economically active men have completed vocational training and 5.4% have graduated from university, compared to 14.9% and 4.0% respectively for women

The General Statistics Office estimates that 81% of the female workforce works in the informal economic sector (2004). While informal employment offers flexibility and critical incomes for women, it also leaves them vulnerable and at risk to labour exploitation due to lack of regulation and access to social protection.

Inequality in Salaries

The GSO (2008) reports that, on average, men earn 34% more than women. This gap varies with the level of education completed. Men earn up to 4% more than women with short-term vocation training. The income gap is less for those who have attended secondary vocational school. Income disparities are partly due to differences in skill levels attained by men and women (i.e. access to training), and are most pronounced in the private sector, compared to state-owned enterprises.