Lost in transition? Declining returns to education in Vietnam

Evidence exists of a fast increase in the returns to education in Vietnam in the 1990s and 2000s. However, there was a huge change in education policy in the mid-2000s, opening up opportunities for education providers to expand enrolment. This may lead to a decline in the returns to education in later years when the changes have generated sufficient effect. To provide up-to-date estimates of the returns, we re-visit the returns using updated large survey data up to 2014. We apply the OLS and Heckman selection estimators which can correct for selection bias and find that both estimators provide a consistent trend of the returns, which increased quickly up to the global financial crisis in 2008/2009 and then declined afterwards. This raises a question whether higher educated labour force is oversupplied.