(TIỂU LUẬN) ADVANCED PROGRAM IN INTERNATIONAL BUSINESS ADMINISTRATION GROUP 5 RESEARCH TOPIC UNEMPLOYMENT IN VIETNAM DURING THE COVID 19 PANDEMIC

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FOREIGN TRADE UNIVERSITY
SCHOOL OF BUSINESS AND ECONOMICS
=====000=====

ADVANCED PROGRAM IN INTERNATIONAL BUSINESS
ADMINISTRATION
GROUP 5
RESEARCH TOPIC: UNEMPLOYMENT IN VIETNAM DURING THE
COVID-19 PANDEMIC
Name
Bui Phu Khang
Pham Ba Loc
Le Huy Phat
Tran Quoc Binh

ID
2012280017
2011280208
2012280032
2013280008

Name
Nguyen Thi Quynh Nhu
Tran Thao Minh Nhi
Vu Ngan Giang
Vu Uyen Nhi

ID
2012280030

2012280029
2014280202
2013280026


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Table of Contents
INTRODUCTION......................................................................................................................4
Reason for choosing the topic......................................................................................................4
Aims and Objectives....................................................................................................................5
Study Scope..................................................................................................................................5
Methodology................................................................................................................................5

CHAPTER 1: BASIC RATIONALE.....................................................................................6
1.1. DEFINITION OF UNEMPLOYMENT...............................................................................6
1.2. CLASSIFICATION OF UNEMPLOYMENT......................................................................7
1.3. CAUSES OF UNEMPLOYMENT.......................................................................................8
1.3.1. Unemployment from a Recession..................................................................................8
1.3.2. The Natural Rate of Unemployment..............................................................................9
1.4. EFFECTS OF UNEMPLOYMENT.....................................................................................9
1.4.1. Effects of unemployment on the economy.....................................................................9
1.4.2. Effects of unemployment on employees and their families...........................................9
1.4.3. Effects of unemployment on politics and society.........................................................10

CHAPTER 2: UNEMPLOYMENT SITUATION IN VIETNAM DURING THE
COVID-19 PANDEMIC.........................................................................................................12
2.1. STATISTIC OF UNEMPLOYMENT IN VIETNAM DURING THE COVID-19
PANDEMIC...............................................................................................................................12
2.1.1. Unemployment rate by area.........................................................................................12

2.1.2. Underutilized labor force..............................................................................................13
2.1.3. Unemployment rate by education level........................................................................14
2.1.4. Youth unemployment rate.............................................................................................14
2.2. CAUSES OF UNEMPLOYMENT IN VIETNAM DURING THE COVID-19
PANDEMIC...............................................................................................................................15
2.3. EFFECT OF UNEMPLOYMENT IN VIETNAM DURING THE COVID-19
PANDEMIC...............................................................................................................................16
2.3.1. Effects of unemployment on the economy...................................................................16
2.3.2. Effects of unemployment on employees and their families.........................................18


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CHAPTER 3: GOVERNMENT POLICY AND EXPERT RECOMMENDATION
.......................................................................................................................................................19
3.1. GOVERNMENT POLICY.................................................................................................19
3.1.1. Policies on monetary....................................................................................................19
3.1.2. Policies on education & training..................................................................................19
3.1.3. Policies to support businesses and individuals impacted by the COVID-19 pandemic
................................................................................................................................................20
3.2. EXPERT RECOMMENDATION.......................................................................................21

CONCLUSION.........................................................................................................................23
REFERENCE.............................................................................................................................24

Table of Figur
Figure 1: The unemployment rate in the working-age in the 2nd quarter of the period 2011 - 2020
by urban and rural areas (Unit: %)...............................................................................................13
Figure 2: Working-age unemployment rate by professional and technical qualifications (Unit: %)
.......................................................................................................................................................14

Figure 3: GDP growth rate in Vietnam from 2011 to 2020 (Unit %)............................................17
Figure 4: Policies to reduce unemployment..................................................................................21
Y

Equation: Calculate Unemployment Rate.......................................................................................6


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INTRODUCTION
Reason for choosing the topic
Unemployment is universally regarded as undesirable. Unemployment is a state of affairs
in which people who are actively looking for work are unable to find work. Unemployment is a
global issue that affects both developed and developing countries alike. Because of the COVID19 pandemic, this is more prominent than ever. It has gotten worse over time, especially since the
global economic crisis, and it has become a threat to social development, whilst consideration
must be given to global economics.
Vietnam's development in the economy over the past 30 years is remarkable. Economic
and political reforms since 1986 have spurred economic development, rapidly transforming
Vietnam from one of the poorest countries in the world to a low-middle-income country. 2019
marked the success of Vietnam's economy for the second consecutive year, achieving and
exceeding 12/12 socio-economic development targets (World Bank, 2021). According to The
Ministry of Finance, some key factors supporting economic growth in 2019 were: macroeconomic stability has been consolidated more firmly; inflation was controlled at a low level, the
roadmap for adjusting public service prices had reached the final stage. However, Vietnam's
economy in 2019 had to face several 3 types of unemployment are workload or to this 3 types of
unemployment are risks such as complicated and unpredictable trade tensions, which continued
to affect the global economic outlook and consumption and investment demand from other
countries in the world. Therefore, the Vietnamese economy will still encounter serious problems
when facing an economic shock and in this case, is the COVID-19 pandemic.
COVID-19's breakout has posed unprecedented problems, and it has been a substantial
influence on Vietnam's economic growth. The pandemic caused delays and interruptions in

manufacturing, supply, and commerce circulation, aviation, tourism, labor, and employment.
Many firms have had to halt operations or go bankrupt, dissolve, or scale down their production
and activities. Many others are facing the possibility of losing their employment. This will have a
direct impact on their everyday lives, as a result of the epidemic. Unemployment has become a
major topic that people worry about, as well as one of the government's main priorities.


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Moreover, the labor market crisis created by the COVID-19 epidemic is far from finished,
according to the International Labour Organization's World Job and Social Outlook – Trends
2021, and employment growth will not be enough to balance the harm until at least 2023.
As a rapidly developing country, Vietnam needs abundant human resources in different
industries. The COVID-19 period caused many negative impacts on various sections of the
economy, including the labor force. Those effects are expected to lead to unwilling outcomes for
the economy. Therefore, Vietnam's unemployment problem in the context of the COVID-19
pandemic needs to be taken seriously by the Government.
Aims and Objectives
For the reasons mentioned above, the primary goal of this research is to help students
deepen their understanding of unemployment in Vietnam during the Covid-19 pandemic. This
research will highlight the basic principle of unemployment and the work labor situation in
Vietnam. Simultaneously, based on outstanding concerns, we will also demonstrate some
government policies, and experts’ recommendations to deal with the problem.
Study Scope
Although unemployment is not a new issue in Vietnam, it affected the economy
dramatically during the Covid-19 pandemic. Therefore, all research and statistics are focused on
unemployment in Vietnam from 2020 to the beginning of 2021.
Methodology
This study's primary methodology is secondary data. The data was gathered from
previous studies and papers, filtered to remove any irrelevant or inaccurate information, and then

used to form our own opinion and assessment.
Under each section of the report, all sources of publications and articles are cited.


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CHAPTER 1: BASIC RATIONALE
1.1. DEFINITION OF UNEMPLOYMENT
Unemployment is the number of people in working age who are without work, but
available for work at current wage rates. The most common measure of unemployment is the
unemployment rate. The unemployment rate is expressed as a percentage and calculated as
follows:
Equation: Calculate Unemployment Rate

To understand how the unemployment rate is calculated we can use an example. In this
example, 12.6 million people are employed and 0.7 million people are unemployed. The size of
the labor force is calculated as the sum of these groups.
Employed + Unemployed = Labour Force
12.6m

+ 0.7m

= 13.3m

With the unemployment rate being the percentage of people in the labor force who are
unemployed, using the numbers in our example and the equation below, the unemployment rate
is calculated as 5.3 percent.
Unemployment Rate = (Unemployed / Labour force) * 100
= (0.7 / 13.3) *100
= 5.3%

Unemployment rate is the most commonly used indicator for understanding conditions in
the labor market. The labor market is the term used by economists when talking about the supply
of labor (from households) and demand for labor (from businesses and other organizations). The


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unemployment rate can also provide insights into how the economy is performing more
generally, making it an important factor in thinking about monetary policy.
1.2. CLASSIFICATION OF UNEMPLOYMENT
There are 3 types of unemployment that are most prominent.
Structural unemployment is one of the main types of unemployment within an economic
system. It focuses on the structural problems within an economy and inefficiencies in labor
markets. Structural unemployment occurs when a labor market is not able to provide jobs for
everyone who is seeking employment. There is a mismatch between the skills of the unemployed
workers and the skills needed for the available jobs. It is often impacted by persistent cyclical
unemployment. For example, when an economy experiences long-term unemployment
individuals become frustrated and their skills become obsolete. As a result, when the economy
recovers they may not fit the requirements of new jobs due to their inactivity.
Structural unemployment tends to be longer lasting than other types of unemployment.
This is because it can take several years for workers to develop new skills or move to a different
region to find a job that matches their skills. As a result, workers who are unemployed because of
structural factors are more likely to face long-term unemployment (for more than 12 months).
Frictional unemployment is another type of unemployment within an economy. It is the
period between jobs when a worker is searching for or transitioning from one job to another.
Frictional unemployment is always present to some degree in an economy. It occurs when there
is a mismatch between the workers and jobs. The mismatch can be related to skills, payment,
work time, location, seasonal industries, attitude, taste, and other factors. Frictional
unemployment is influenced by voluntary decisions to work based on each individual’s valuation
of their workload.

Cyclical unemployment is a type of unemployment that occurs when there is not enough
aggregate demand in the economy to provide jobs for everyone who wants to work. In an
economy, demand for most goods falls, less production is needed, and fewer workers are needed.


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With cyclical unemployment, the number of unemployed workers is greater than the number of
job vacancies.
In addition to these 3 types of unemployment most often focused on, MintLife Blog
mentions other types of unemployment that you might encounter or experience:


Regional unemployment: This occurs when an industry moves out of an area, or some
other localized condition causes unemployment.



Seasonal unemployment: Some jobs only exist during some parts of the year. For
example, ski instructors might face seasonal unemployment during the warmer months.



Voluntary unemployment: People might be voluntarily unemployed if they are making
enough money from other sources, such as a spouse, inheritance, or investments.



Classical unemployment: Classical unemployment occurs when the rate of wages is too
high for employers to afford, so there is a surplus of unemployed labor.

1.3. CAUSES OF UNEMPLOYMENT
Unemployment is caused by a multitude of factors on both the demand and supply sides.
Demand-side reductions might be influenced by high-interest rates, a global recession, or a
financial catastrophe. Factors that cause a change in supply sides include employment wage and
technological change. Frictional unemployment and structural employment also have a big
impact on the supply side (Pettinger, 2014).
In many countries around the world, the causes of unemployment can be divided into two
categories: cyclical unemployment, which is caused by the economy being in a slump, and
natural rate unemployment, which is caused by factors in labor markets such as government
regulations on hiring and starting businesses.
1.3.1. Unemployment from a Recession
The Keynesian economic model emphasizes that both monetary and fiscal policy options
are available to address unemployment induced by a recession. The prescription for dealing with


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a recession is simple: use an expansionary monetary policy to raise the amount of money and
loans available, lower interest rates, and boost aggregate demand.
1.3.2. The Natural Rate of Unemployment
In principle, addressing the natural rate of unemployment is simple, but in fact, it is
challenging. The government can help by giving unemployment and welfare benefits, enacting
rules governing where and when enterprises can operate, and ensuring worker safety. However,
in certain circumstances, these well-intentioned restrictions might become so intrusive that
businesses decide to limit their hiring. Legislation that imposes high costs on a company that
tries to dismiss or lay off employees, for example, will cause companies to want to avoid
recruiting in the first place.
1.4. EFFECTS OF UNEMPLOYMENT
1.4.1. Effects of unemployment on the economy

Unemployment increases government payments for unemployment benefits and food
assistance. Simultaneously, governments are no longer receiving the same amounts of income tax
as previously, forcing them to borrow money, deferring the costs and impacts of unemployment
into the future, or cut back on another spending. When people are unemployed, they spend less
money, resulting in a lower contribution to the economy in terms of services or goods supplied
and produced, lowering GDP and shifting the country away from effective resource allocation.
Businesses pay a price for high unemployment. Unemployment benefits are mostly
funded by business taxes. When unemployment is high, states frequently attempt to replenish
their coffers by raising company taxes, which discourages companies from hiring more workers.
Companies are not only facing lower demand for their products, but it is also more expensive for
them to keep or hire employees (Simpson, 2020).
1.4.2. Effects of unemployment on employees and their families
Unemployment generates financial difficulty for workers, which has an impact on their
families, relationships, and communities. The repercussions of unemployment are far-reaching.


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Even individuals who are not laid off from their office employment may find that their jobs (as
well as their personal life) have been harmed.


Employees Work Harder but Earn Less: In a piece for The New York Times titled "The
Enduring Consequences of Unemployment," it was pointed out that workers who were
laid off during the severe early 1980s recession, for example, earned around 20% less
than the average 20 years later.



Impact on Retirement Savings: One of the first things to be impacted by the loss of a job

is personal savings accounts. According to a 2017 research from The Hartford, 42 percent
of respondents avoided the market after the 2008 financial crisis, while 26 percent
modified their retirement plans.



Health problems: The bodily santé of a person may also be affected by unemployment.
Unemployment can lead to stress-related disorders such as headaches, hypertension,
diabetes, cardiac illness, back pain, and sleeplessness. While the chances of unemployed
persons spending money on health expenditure are lower. Through skip preventive
actions, the danger of bodily and psychological deterioration is increased.
Throughout the board, the stability of children with unemployed parents is lower. When

struggling to make ends meet, anxiety can strain the parent-child relationship and take a toll on
not only the physical but also the mental health of individual family members. Economic and
psychological pressures that can lead to changes in accommodation or family friction can have
long-term adverse effects on children's development (Lindner & Peters, 2016) .
1.4.3. Effects of unemployment on politics and society
Unemployment also impacts politics and society. The more persistent the issue, the more
likely society will experience potential negative effects such as lower human capital, higher
crime and poverty, and civil unrest.


The efficiency of resource uses: A high-unemployment economy does not make efficient
use of all of its resources, particularly labor. When people take jobs that are below their


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ability level, the economy's efficiency suffers even more. Workers' skills deteriorate,

resulting in a loss of human capital.


Government policy: Unemployment can cause an increase in calls for protectionism and
draconian immigration restrictions. Not only can protectionism lead to damaging tit-fortat retaliation among countries, but trade reductions undermine the economic well-being
of all trading partners (Simpson, 2020).



Crime rate: Times of elevated unemployment often correlate both with less volunteerism
and higher crime. Elevated crime makes sense, because absent a wage-paying job, people
may turn to crime to meet their economic needs.



Poverty rate: While one unemployed person will typically not have a significant impact
on society, high unemployment rates in certain areas often lead to higher poverty rates
and poorer neighborhoods that amplify the societal impact of unemployment.
Communities with high unemployment rates are more likely to have limited employment
opportunities, low-quality housing, fewer available recreational activities, limited access
to public transportation and public services, and underfunded schools.



Civil unrest: High unemployment rates can cause civil unrest in a country.
Unemployment is associated with political violence and armed conflict in developing
countries. (Indeed Editorial Team, 2021)

.

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CHAPTER 2: UNEMPLOYMENT SITUATION IN VIETNAM DURING
THE COVID-19 PANDEMIC
2.1. STATISTIC OF UNEMPLOYMENT IN VIETNAM DURING THE COVID-19
PANDEMIC
Before the Covid-19 pandemic, according to the data from the General Statistics Office,
the unemployment rate of the population aged 15 and over was as low as 2.05%. In rural areas,
the unemployment rate is nearly 2 times lower than in urban areas (1.64% and 2.93%). The
majority of unemployed people are aged 15-54 (accounting for 91.7% of unemployed people), in
which, workers aged 15-24 have the highest unemployment rate, accounting for 44.4% of the
total number of unemployed people.
In the second quarter of 2021, there were 12.8 million people aged 15 and over
negatively affected by the COVID-19 pandemic, including those who lost their jobs, got
furloughed, worked alternate shifts, reduced working hours, reduced income, etc. Specifically,
out of a total of 12.8 million people negatively impacted by the COVID-19 pandemic, 557
thousand people lost their jobs, accounting for 4.4%.
The number of employed workers in the second quarter of 2021 was lower than in the
same period in 2019, the year without the COVID-19 pandemic, by nearly 500,000. If the
pandemic is controlled and the economy is fully recovered, then to achieve the initial (prepandemic) normal state, compared to the same period last year, the size of employed workers this
year needs to increase by 3.6 million, not 1.8 million as has been observed. (General Statistics
Office, 2020)
2.1.1. Unemployment rate by area
According to the General Statistics Office, the unemployment rate in the working-age in
the 2nd Quarter of 2020 was 2.73%, particularly, the unemployment rate in the working-age in
the urban areas was 4.46%, the highest figure in the last 10 years, 1.36 percentage points higher
than that in the same period last year.

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Figure 1: The unemployment rate in the working-age in the 2nd quarter of the period
2011 - 2020 by urban and rural areas (Unit: %)
In 2021, a year into the COVID-19 pandemic, the working-age unemployment rate in the
second quarter was 2.62%, down 0.11 percentage points over the same period last year. Of these,
the working-age unemployment rate in urban areas was 3.36%, down 1.1 percentage points
relative to the respective periods (Ha, 2021).
2.1.2. Underutilized labor force
In the context where the pandemic has continued to spread, the working-age
unemployment rate still shows the sign of increase: The working-age unemployment rate in the
second quarter of 2021 was 2.62%. However, according to the “Report on the impact of covid-19
on labor and employment” (2021), the ongoing pandemic, with its complicated developments,
has robbed workers of any hope of finding work. As a result, after losing a job, workers believe
they will be unable to find another job and choose to leave the labor force temporarily, becoming
part of the economy's underutilized labor force. This makes the number of unemployed people
not increase in tandem with the number of people who lose their jobs and are pushed out of the


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labor market and therefore results in the unemployment rate not increasing as high, only
hovering around 2% even if the labor market experienced many uncertainties.
2.1.3. Unemployment rate by education level.
The working-age unemployment rates among workers with professional and technical
qualifications in the second quarter of 2021 all decreased relative to the same period last year.
From the data collected by the General Statistics Office, these rates in elementary, intermediate,
college, and university and above groups decreased by 1.35, 0.37; 0.47, and 0.09 percentage
points, in that order, relative to the previous quarter. However, compared to the data in the 2nd
quarter of 2019 (before the COVID outbreak), the unemployment rate is still larger: these rates in

elementary, intermediate, and college groups increase by 0.85, 0.04, and 0.19 percentage points,
respectively. Meanwhile, the rate in university and above decreases by 0.2% points. This
situation suggests that when the economy is in shock, unqualified workers encounter more
difficulties in job opportunities than those with professional and technical qualifications.

Figure 2: Working-age unemployment rate by professional and technical qualifications
(Unit: %)
2.1.4. Youth unemployment rate


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During the pandemic, the youth unemployment rate remained high. The proportion of
youth (15 to 24 years old) not in employment, education, or training (NEET) continued to climb.
According to the data from the General Statistics Office:


In the second quarter of 2021, the youth unemployment rate (i.e 15-24 years old) was
7.47%, 0.97% percentage point higher than in the same period before the pandemic
(in 2019), and nearly 3 times higher than the working-age unemployment rate. The
youth unemployment rate in urban areas was 1.5 times higher than in rural areas. That
is, in urban areas, for every 100 young economically active people aged 15-24, about
10 people are unemployed, this number is 6 in rural areas.



In the second quarter of 2021, the whole country had nearly 2 million (accounting for
16.7%) young people aged 15-24 not in employment, education, or training, an
increase of 243,000 people over the same period last year. The youth NEET rate is
higher in rural areas than in urban areas, 18.7% relative to 13.3%, and much higher

among young women than young men, 19.1% versus 14.4%.

2.2. CAUSES OF UNEMPLOYMENT IN VIETNAM DURING THE COVID-19
PANDEMIC
The Covid-19 pandemic appeared in Vietnam from January 2020 has directly affected the
situation of labor and employment in all sectors and all provinces and cities directly under the
Central Government, pushing tens of millions of workers into unemployment or
underemployment. For this extremely serious unemployment situation to occur, we need to
consider many different causes:


On the demand side, one of the causes was the global recession. Covid -19 pandemic has
seriously affected all socio-economic fields, disrupted supply chains, and trade flows, and
stalled production, business, and service activities. Many businesses went bankrupt,
dissolved, suspended operations, downsized… Therefore, cutting down labor to reduce
total costs is a must. According to the Employment Department, in the first 7 months of
the year, the number of enterprises withdrawing from the market was higher than the
number of newly-established enterprises, increasing by 25.5% over the same period last


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year (there were 79.7 thousand enterprises withdraw from the market; 75.8 thousand
enterprises registered for new establishment). On average, more than 11.3 thousand
enterprises withdraw from the market every month. The number of enterprises
withdrawing from the labor market occurred in all industries, however, focusing heavily
on the wholesale, retail, and repair of automobiles and motorcycles; manufacturing and
processing industry; construction; accommodation and catering services; real estate
business; education,... (baotintuc.vn, 2021).


On the supply side, frictional unemployment was the main cause of unemployment.
Policies from the Government had affected businesses and the labor force with
regulations on person-to-person distance and not congregating. For example, the
Directive no.16 of the Vietnamese government mentioned: "require everyone to stay at
home, only going out in cases of absolute necessity, such as working at factories,
production facilities, business establishments providing essential services and goods that
are not closed or shut down shutdowns and other emergencies''. This forced the majority
of the labor force to stay at home and drop their work.

2.3. EFFECT OF UNEMPLOYMENT IN VIETNAM DURING THE COVID-19
PANDEMIC
2.3.1. Effects of unemployment on the economy
For every countries, unemployment is a waste of human resources. It does not promote
economic development and can easily lead to social disturbances. The Covid-19 pandemic that
appeared in Vietnam from January 2020 has directly affected the labor and employment in all
industries. The increase in unemployment means that the social labor force that cannot be
mobilized into production and business activities increases. This causes a waste of social labor one of the basic factors for economic development.
Furthermore, the lack of long-term use of professional skills also affected the skills of each
worker. The worker could not transfer to other professions or go back to work markets. The
Covid-19 pandemic made the manufacturer and the company unable to maximize labor
resources. From the beginning of 2020, production was interrupted due to the pandemic


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outbreak. The number of unskilled workers leaving the industrial area was increasing. In the long
term, there will be a shortage of human resources when businesses return to production. As a
result, the enterprises do not have skilled workers to produce and have difficulty with their plans.
In 2020, the General Statistics Office declared that Vietnam had 101,700 cases of enterprise

dissolution, which was an increase of 13.9% compared to last year (Aztaz, 2021). The increase in
the number of bankrupt enterprises has reflected the difficulty of production and business
conditions.
Rising unemployment also means the economy is in recession because real gross national
income is below potential. In general, in 2020, Vietnam's GDP increased by 2.91% (in the first
quarter, by 3.68%; in the second quarter by 0.39%; in the third quarter by 2.69%; in the fourth
quarter by 4,48%). This is the lowest increase of the years in the period 2011-2020 (Ha, 2020).

Figure 3: GDP growth rate in Vietnam from 2011 to 2020 (Unit %)
In addition, unemployment causes budget capital to be narrowed due to tax revenue loss. The
government must support workers who lose their jobs resulting in a decline in capital investment.
In 2021, the Government implemented support packages of 62,000 billion VND and 26,000
billion VND for people in difficulty because of the Covid-19 epidemic (Phan, 2021). The target
of the support packages is to minimize the negative impacts of the pandemic, restoring
production and business. The support packages can also help to stabilize labor and employment,
ensuring life and safety for workers. However, the implementation result was only 53% of the
plan (Hong, 2021). The Government needs to have appropriate policies to optimize the bailout
packages, avoiding losses to the national budget.


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2.3.2. Effects of unemployment on employees and their families
Unemployment cuts off the main source of income for workers (especially in developed
market countries), and at the same time, cuts off the means of livelihood of workers and their
families. The closing of businesses makes many workers temporarily unemployed, affecting their
income and daily life. As income stagnates, millions of Vietnamese are struggling to make ends
meet. The General Statistics Office conducted a survey covering 63 provinces and cities,
including 46,995 representative households. Accordingly, the average income in 2020 was about
4.23 million VND/person/month, declining about 2% compared to 2019.

Workers without salary fall into poverty as they cannot afford basic living expenses such
as rent, electricity, water. Many families suffered from homelessness when they did not have
enough money to pay for accommodation. The consequences that unemployment creates for
these households are significant: difficulties in going to school for young children, health
declines due to lack of medical care,...
Unemployment puts a heavy burden on not only family expenditures but also the
development of children. The family's economic situation does not allow children to have the
opportunity to attend a school or access educational facilities. Parents are not eligible to pay
tuition and study-related expenses, for example, laptop, smartphone for online learning. In
addition, the financial burden causes many children to drop out of school to work part-time to
earn money for their families. In rural families, children often have to work to contribute to the
family income or help with housework. Therefore, dropping out of school is a way to save
money for the family and cut down on the opportunity cost of going to school.


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CHAPTER 3: GOVERNMENT POLICY AND EXPERT
RECOMMENDATION
3.1. GOVERNMENT POLICY
To safeguard the stability of the economy and the lives of those impacted by the
epidemic, the Vietnamese government has implemented programs to address the covid 19
unemployment concerns.
3.1.1. Policies on monetary
Loan to pay job severance payment: The employer is entitled to a 0% interest loan from
the Bank for Social Policies and is not required to conduct loan security measures in order to pay
the employee's stoppage salary. According to the real pay-off period of up to three months, the
maximum loan amount is equivalent to the regional minimum salary for the number of
employees. The loan is for less than a year.
Loan to pay wages to restore production: Employers must temporarily suspend operations

due to the request of competent state agencies to prevent COVID-19, and employers operating in
the fields of transportation, goods, tourism, accommodation services, and sending Vietnamese
workers abroad under contracts are eligible for a loan from the Bank for Social Policies at a 0%
interest rate and a repayment period of up to two years. Loans to pay wages to employees who
are employed under a labor contract and are required to participate in social insurance. The
maximum loan amount is equal to the regional minimum wage multiplied by the number of
employees employed under a labor contract for a period of up to three months. The loan is for 3
types of unemployment are less than a year (Portal of Thanh Hoa Department of Justice, 2021).
3.1.2. Policies on education & training
The employer is entitled to financial support for training, retraining, and improvement of
vocational skills from the Unemployment Insurance Fund when fully paying unemployment
insurance premiums for employees for a full 12 months or more (Portal of Thanh Hoa
Department of Justice, 2021).


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3.1.3. Policies to support businesses and individuals impacted by the COVID-19 pandemic
Facing the unemployment issue during the covid 19 pandemic, at the regular Government
meeting held in early May 2021, Minister of Planning and Investment Nguyen Chi Dung
proposed that the Government assigns the Ministry of Labor, Invalids, and Social Affairs to
urgently research and implement policies and solutions to support workers who are still facing
difficulties due to the impact of the epidemic; at the same time, promote the connection between
supply and demand in the labor market, and activities to support job search for workers (Thuy,
2021).
Specifically, ministries, branches, and localities need to create conditions to continue to
remove difficulties for production enterprises; in which, focusing on reforming processes and
procedures so that enterprises can access simple, convenient, and timely support policies to
stimulate the economy, as well as demand for labor. These measures help businesses and
employees escape the risk of bankruptcy, job loss, and income reduction and, but also create a

driving force to promote business development.
Along with that, the General Statistics Office leaders also suggested that localities
actively deploy specific support packages, diversify forms of subsidies, and expand vocational
training programs suitable for many different subjects. objects, especially female workers,
workers without professional and technical qualifications, informal workers, to stabilize social
security, create motivation for employees to work, and contribute to the process of rehabilitation.
recovery and economic development.
On July 20, the Government issued Resolution No. 78 /NQ-CP thematic session of the
Government on COVID-19 prevention and control. In particular, the Government requires
agencies and units to increase work online, and arrange for employees to work alternately at the
office by no more than 50%. Each job position at the unit only assigns 1 person to work
permanently at the agency. With the remaining staff, they will alternate work, work online
accordingly and check the compliance with epidemic prevention work of the people in the area.
Besides, it is increasing the opening of many job exchanges to help more people find
suitable new jobs. To create favorable conditions for employees and the recruitment needs of


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enterprises during the epidemic, the Employment Service Center has increased the activities of
counseling on job introduction, job retraining, and job creation for people with disabilities. labor.
The center organizes job sessions at the exchange points for workers to directly meet recruiting
enterprises to find jobs according to the capacity and needs of the employer. Along with that, the
City Social Insurance also directs its affiliated units to actively coordinate with the district,
district, and enterprise Labor Confederations to handle issues related to social insurance benefits
and insurance. health care, unemployment insurance for workers.
3.2. EXPERT RECOMMENDATION
The issue of unemployment during the COVID-19 epidemic is still exceedingly stressful
all over the world. Therefore, the government needs to develop appropriate strategies to mitigate
the negative impacts of this circumstance. Fiscal policy, monetary policy, education and training,

geographical subsidies, lower minimum wages, or the removal of labor market rules are some of
the typical policy alternatives that can be used

Figure 4: Policies to reduce unemployment
Economic expert Nguyen Bich Lam, Director of the General Statistics Office, suggested
that ‘Enterprises need to apply technology to production stages and processes where machinery


22

and equipment can replace workers to stabilize society. The Government and the business
community need to create a social security fund to ensure a minimum life for lost workers. These
policies not only maintain production activities but also improve labor productivity of the
econom’.
Dr. Chang-Hee Lee, Director of the International Labor Organization in Vietnam,
answered when asked about the solution to the unemployment problem during the current covid19 pandemic ‘Different businesses have difficulties. This means that Government support should
target businesses with positive prospects because of their productivity and innovation but facing
a temporary crisis. I would also like to emphasize that the Government should direct support and
assistance packages to businesses that do their best to keep workers and reduce unemployment
through adjustments to working hours, job sharing, on-the-job training, and wage reductions in
consultation with unions and workers. Do our best in keeping workers and minimizing layoffs,
thereby slowing down the layoff process, minimizing the shock to society caused by the crisis
while preserving worker productivity for a faster post-COVID-19 recovery’ (www.ilo.org, 2021).


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CONCLUSION
The problem of unemployment is not a new issue that emerged overnight. Unemployment
is a socio-economic phenomenon that exists for many periods and is considered a central

problem of modern societies. When the unemployment rate is high, it will directly or indirectly
affect all aspects of social life. Although unemployment causes a lot of negative consequences, it
is very difficult to have no unemployment. The government has implemented various measures
and mitigating strategies to deal with the problem. However, the severity of the problem
overrides the initiatives and assistance in curbing these issues.
The outbreak of the Covid-19 pandemic has brought challenges unprecedented in decades
to all economic and social development activities globally. It has caused many negative
economic consequences, including an increase in the unemployment rate in Vietnam.
Employment issues during and after the pandemic are becoming a major concern of the
government. Therefore, the government needs to have reasonable policies and measures to
reduce the unemployment rate and maximize human resources to develop the country.


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