Can training close the gender wage gap? Evidence from Vietnamese SMEs

Firm-provided training is generally seen as an important tool for bridging the skills gap between the labour force and what the private sector demands. Little is known about how successful such training can be in closing the gender wage gap. We use a matched employer-employee panel dataset to assess why firms train and whether formal training affects wage outcomes in Vietnamese SMEs. Training is generally found to be firm-sponsored and specific in nature. We find that training is associated with higher wages for trained women as compared to both untrained women and men. However, we do not find a statistically significant wage difference between trained women and men. Furthermore, the wage increase is only associated with on-the-job training. Our findings indicate that, at least in Vietnam, firm-sponsored on-the-job training could help increase women’s labour productivity and thus contribute to closing the gender wage gap.