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Vietnam is one of the only South East Asian emerging economies not to have gone into recession in 2009 in the wake of the world crisis. Nonetheless, it has been affected deeply by the crisis, as shown by all macro-economic indicators. The yearly growth rate of Gross Domestic Product (GDP) has been slowing down from 8.5 percent in 2007 to 6.3 percent in 2008 then 5.3 percent in 2009, before recovering to 6.5 percent in 2010. Overall, because of productivity gains and rapid growth of the labour force due to the 'demographic dividend' which is currently peaking, an average economic growth of 7.5 percent such as attained during 2000-2008 is hardly sufficient to absorb new entrants on the labour market. Even with such a high growth rate, around one fourth of new entrants end up in the informal sector. The latter thus absorbs the labour surplus which agriculture and the formal sector are unable to employ. Several quick qualitative assessments of the impact of the crisis have been conducted in Asia and especially in Vietnam, based on a small number of interviews in some selected industries. They indeed put in evidence the impact of the crisis on the informal sector in terms of employment, number of hours worked and wages. But, due to the lack of data, no quantitative study of the impact of the crisis on the informal sector had been conducted until now. This is precisely the objective of this policy brief, based on the results of two rounds of Household Business and Informal Sector (HB&IS) surveys conducted on a statistically representative sample in Hanoi and HCMC in 2007 and 2009 within an international research project between Vietnam's General Statistics Office (GSO) and the French Institute. This brief can be usefully complemented by two companion papers: the first one presents the adjustment of the labour market and the informal economy nationwide the second one provides detailed results on the dynamics of the informal sector in the two main cities between 2007 and 2009.

Debt --- Developed Countries --- Developing Countries --- Economics --- Employment --- Employment and Unemployment --- Gdp --- Household Income --- Income Distribution --- Inequality --- Informal Sector --- Insurance --- International Labour Organization --- Labor Markets --- Labor Policies --- Mortality --- Poverty Impact Evaluation --- Poverty Monitoring & analysis --- Poverty Reduction --- Productivity --- Profit Sharing --- Public officials --- Savings --- Social Protections and Labor --- Temporary Workers --- Transparency --- Unemployment --- Wages --- Workers --- Working Hours

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In 2007, the General Statistics Office (GSO) launched a joint research program with the French Institute of Research for Development (IRD), to measure and analyzes the informal sector in Vietnam. Two kinds of surveys were conducted in 2007: a national Labour Force Survey (LFS), which, in a first for Vietnam, classified labour by institutional sector, separating out the informal sector; two specific surveys, in Hanoi and Ho Chi Minh City (HCMC), which were grafted onto the LFS2007 to find out more about the characteristics of Household Businesses (HBs) in general and especially the informal sector. These surveys have been extensively analyzed, and the full results edited in a book. Two years later, this successful experience has been re-conducted, with the additional objectives to consolidate the methodology and to assess the impact of the global crisis on the labour market in general and the informal economy in particular. This paper presents the main findings (both methodological and analytical) of these two rounds of surveys as regards the informal sector in Hanoi and HCMC. In the context of the global crisis, it looks at the dynamics of the informal sector between 2007 and 2009. Taking advantage of this unique survey protocol, the first part investigates the macro dynamics comparing the two representative cross sections, while the second focuses on the micro dynamics drawn from the panel component. Transitions between formal and informal sector are explored. The third part aims at analyzing the perception of HBs' heads to assess the impact of the crisis. Then, the last section explores the changes as regards the problems faced by HBs, their interaction with the state and their outlook. In the conclusion, the author determines some of the implications of the findings in terms of economic policies. This report can be usefully complemented by two companion papers: the first one presents the adjustment of the labour market and the informal economy nationwide, based on the LFS2007 and 2009; the second one is a policy brief on the impact of the crisis on the informal sector in Hanoi and HCMC.

Agriculture --- Business Environment --- Capacity Building --- Collateral --- Debt --- Developing Countries --- Employment and Unemployment --- Gdp --- Health Education --- Household Income --- Income Distribution --- Informal Sector --- Insurance --- Labor Market --- Labor Markets --- Poverty Assessment --- Poverty Impact Evaluation --- Poverty Monitoring & analysis --- Poverty Reduction --- Public Policy --- Savings --- Selection Bias --- Social Protections and Labor --- Technical Training --- Temporary Workers --- Transparency --- Unemployment --- Wages --- Workers --- Working Hours