The Impact of Some Macro-Economic Factors on Vietnam Youth Entrepreneurship and Self-Employment

Abstract:The main objective of this work is to empirically understand the impact of some macro-economic factors on youth entrepreneurship and self-employment. In comparison with most of the existing literature that mainly considers self-employment in general, this study refers to two groups of young self-employed people: (i) self-employers who work for themselves (not employers), and (ii) business managers/owners (employers), and points out the factors that have quite different impacts on these groups. The balanced panel dataset during the period 2006-2009 that corresponds to a strong process of global economic integration in Vietnam is used. Applying fixed and random effects models, the results imply that self-employment is a temporary option for young people when the risk of unemployment and under-employment is high. In addition, the low labor market competitiveness of young people that is mainly due to limited skills and qualifications is the main reason that makes young people engage in the self-employment sector. There was also evidence that regional development factors have promoted local youth entrepreneurship in Vietnam.