Nguyen Van Tran

How does trade liberalization influence household decisions regarding quality and quantity choices? This paper assesses the underexplored effects of a large positive trade-induced price shock on household decisions regarding fertility and education investments and the mechanisms underpinning these effects in the context of Vietnam's trade liberalization in the 1990s. Specifically, I construct the positive trade-induced price shock, and estimate the effects of this shock at the household and individual levels. I find robust evidence that a significant decline in the desire for children was driven by an increase in the trade-induced price shock. However, this shock also significantly contributed to an increase in the probability of children attending school. These results are robust compared to a variety of alternative indicators. I show several economic mechanisms possibly driving these findings through the high opportunity cost of time and structural economic changes. Overall, the analysis highlights the importance of the hypothesis that a country with a comparative advantage in female-labor intensives in the agriculture sector is characterized by improving human capital investment and decreasing fertility in response to trade liberalization.

Keywords: Trade liberalization; Fertility transition; Human capital investments; Opportunity cost of time; Structural change; Labor supply; Vietnam

Winner or Loser? Gender-Specific Labor Market Adjustments and Trade Liberalization (Working paper) (Author, 2023)

Abstract:

This article investigates the effects of a positive trade shock on female and gender-specific local labour market outcomes, employing a novel combination of nationally representative household surveys and firm-level data. I explore Vietnam’s early 2000s trade liberalisation, which generated an exogenous positive labour market shock in regions more exposed to export goods. Results indicate that female workers in regions more exposed to tariff reductions experienced increased wage growth but were significantly less likely to adjust to positive trade shocks compared to men. Consequently, the gains for men were approximately double those for women, leading to a widening of the gender wage gap. However, no gender differences regarding the effects of the trade shock on working hours were observed. The results also suggest that females were more likely to transition from unpaid family work to formal and skilled sectors, with these effects being more pronounced than for men. On the demand side, firms in regions more exposed to tariff reductions exhibited increased growth in female employment and wage per worker, while the effects on male employment were uncertain. Additionally, larger firms with male dominance pay higher wages than smaller firms, and gender occupation segregation increases, highlighting additional avenues through which trade can influence gender-specific outcomes. In overall, Our results suggest that both pull and push factors induced workers to participate in the market.

Nonlinear Effects of Climate Change on Child Labor and Household Adaptation: Evidence from Vietnam (Working paper)

Abstract:

This paper provides novel insights into the causal consequences of extreme weather on child labor and household adaptation by integrating nationally representative survey data with daily climate records in nine waves spanning 2002-2018 in a middle-income country highly vulnerable to climate change. Our analysis explores how both wet and dry temperature extremes affect a range of household adaptation behaviors and dimensions of child labor using temperature-bin fixed-effects models. The results confirm a nonlinear relationship between both wet and dry temperatures and child labor as well as household adaptation, with significant effects primarily driven by extreme temperature shocks. We find that dry temperature has a more stable effect across different temperature bins on child labor and household adaptation compared to wet temperature. Notably, our empirical evidence shows a U-shaped relationship between wet temperature and the probability of child employment, and an inverse U-shaped relationship between wet temperature and the number of market hours worked. The findings support the presence of an income effect under wet temperature conditions, while the effects observed during dry temperatures may be attributed to substitution effects. In response to extreme temperatures, households significantly reduce educational, electricity, and alcohol expenditures, but increase overall energy consumption in response to extreme cold temperatures. In contrast, extreme hot-dry conditions lead to decreased total energy use, while extreme cold-dry conditions prompt higher energy consumption and lower alcohol intake. The opposite pattern is observed during extremely hot-wet periods. The results are robust to alternative specifications and highlight the exacerbating effects of climate change on child inequality, particularly among lower-income households, rural communities, minority groups, and across gender.

4. Trade Diversion and Energy Intensity: Firm-Level Evidence from Vietnam During the U.S.–China Trade War (Working paper)

Abstract:

We examine the environmental and social consequences of trade diversion resulting from the Trump Administration’s 2018–2019 tariffs on all products imported from China. This exogenous trade shock between the world’s two largest economies has raised concerns regarding its broader implications for third countries affected by shifting global value chains. We hypothesize that firms in these countries, seeking to capitalize on new export opportunities, may alter their production strategies, potentially improving energy efficiency or environmental outcomes. Leveraging the natural experiment from the imposed tariffs, we estimate the causal effect of trade diversion on plant-level energy intensity among Vietnamese manufacturing firms from 2012 to 2023. Using a difference-in-differences approach with detailed national firm-level data, we demonstrate that United States (U.S) tariffs on China led to greater diversification in Vietnamese exports to the US at the product level. We then provide evidence on whether trade diversion fosters firm-level adoption of energy-efficient technologies or adjustments to production scales in order to sustain competitiveness. Our findings reveal that firms exposed to U.S. tariffs on Chinese exports decrease their energy intensity by 11.6% and total energy consumption by 22.9% in response to a one-standard deviation increase in tariff exposures, although the effect on aggregate energy physical use and emissions is statistically insignificant. The heterogeneity analysis reveals that the effects are stronger for non-state-owned firms, and polluted-intensive industries. The findings can be attributed to scale effects, energy source substitution, and technology gaps. These results highlight the need for targeted policies that address firm heterogeneity in technology adoption and energy usage.

5. Understanding the Adoption of Flexible Demand Response in Industrial and Commercial Sectors: An empirical investigation in Australia

Abstract:

Flexibility demand (FD) response in grid operation has emerged one of the most constructive, cost-effective solutions to address several problems brought about by the growth of renewable energy generations and the ongoing process of industrialization. A clear understanding of the potential magnitude of FD is essential for accurately quantifying the actual reduction or shift in fossil fuel energy consumption, which is a practical option to overcome these challenges. To date, despite its significance, research and application on measuring the potential of FD responses, particularly for commercial and industrial customers remains still unknown in the decision-making process. This paper, therefore, proposes a first attempt to evaluate the potential of FD responses across key industries. In doing so, we collected data from 455 businesses across different states and regions in Australia, meeting our selection criteria. Our analysis employs the binary logistic model, bivariate probit regressions and ordered logistic regressions to examine influencing determinants for businesses’ willingness to adopt FD initiatives, followed by factors influencing the likelihood of adoption decisions. Our results reveal three key patterns. First, automation and dynamic pricing incentives strongly predict adoption, with automated HVAC and onsite storage delivering the highest flexibility potential. Second, water and wastewater systems exhibit significant shiftable loads, although adoption is influenced by seasonal variability. Third, cold storage and manufacturing show heterogeneous outcomes, with flexibility shaped by production cycles. Barriers include high upfront costs, regulatory constraints, and limited aggregator participation, while enablers range from cost savings to productivity improvements. These findings highlight the need for targeted, sector-specific policies and market mechanisms to unlock latent FD potential, thereby enhancing grid reliability and supporting Australia’s clean energy transition.

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