FOREIGN TRADE UNIVERSITY

DEPARTMENT OF UNDERGRADUATE TRAINING &

MANAGEMENT
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PRINCIPLES OF MACRO – ECONOMICS

REPORT

Impact of COVID – 19 on Youth Unemployment in

Vietnam.

Student: Vu Minh Thu

Student ID:
STT: 2312560044
Class: Anh 01, Digital Business, K62
Class Credits: KTE203E(DB -HK2-2324)K62.1

Instructor:
Associate Professor Nguyen Thi Thuy Vinh
 TABLE OF CONTENTS

A. Introduction
1.Purpose of the Report
B. Content
1. Background Information
1.1. Youth Unemployment: Definition and Relevance.
1.2. Pre-COVID-19 Employment Trends for Youth in Vietnam.
1.3. Brief Overview of Vietnam’s Demographics and Labor Market.
2. Impact of COVID – 19 on Youth Unemployment.
3. Government Response
4. Challenges and Barriers
5. Future Outlook
C. Conclusion
D. References
 Introduction.
1. Purpose of the Report
The purpose of this report is to explore how the COVID-19 pandemic has impacted young
people in Vietnam concerning employment. I want to understand the challenges they have
been through, how different sectors have been affected, and what measures have been taken
to tackle the issue. By looking at the data and stories behind the numbers, this report aims
to see a clear picture of what young job seekers and workers had experienced during the
pandemic.

I’ll also examine the effectiveness of the government's response and offer practical
suggestions for moving forward. The utmost goal is to provide insights that can help
policymakers, educators, businesses, and other stakeholders support young people to
rebuild their careers and finding new job opportunities in the post-pandemic landscape.

Stemming from that reality, I chose to research the topic: ”Impact of COVID – 19 on Youth
Unemployment in Vietnam”. Through learning from unemployment in general, my report
will give specific and particular insights about unemployment and accordingly methods to
provide an in-depth analysis of how the COVID – 19 pandemic has affected youth
unemployment in Vietnam.
 Content.
1. Background Information
1.1. Youth Unemployment: Definition and Relevance.

*Definition.

Youth unemployment refers to the situation where people of age 15 to 24 years are actively
seeking work but are unable to find jobs. This age range is typically considered because it
encompasses the period when young people transition from education to the labor market.

*Relevance.

Youth unemployment matters because:

- Economic Impact: When young people can't find jobs, it hurts the economy. Their
potential is wasted, which slows down economic growth.
- Social Stability: High youth unemployment can lead to social problems like poverty and
increased crime rates. It can also affect mental health and well-being.
- Future Workforce: Early job experiences are crucial for building skills and careers.
Without these opportunities, young people may struggle long-term in their professional
lives. Innovation and
- Growth: Young people bring new ideas and energy. High unemployment means missing
out on this potential for innovation and progress.
- Fairness: Ensuring young people can find jobs is important for fairness and equality. It
helps prevent widening gaps between different social groups.
In Vietnam, addressing youth unemployment is essential because the country has a large,
youthful population that is key to its future growth and development. Ensuring young
people have job opportunities is crucial for the nation's ongoing success.
 Content.
1. Background Information

1.2. Pre-COVID-19 Employment Trends for Youth in Vietnam.

• Shift from Agriculture to Industry and Services: Before COVID-19, many young people
moved from agricultural jobs to better opportunities in manufacturing and services.
Major cities like Hanoi and Ho Chi Minh City saw a significant influx of young
workers attracted by jobs in electronics, textiles, retail, and hospitality.

• Rising Educational Attainment: Educational levels among Vietnamese youth improved,

with more young people enrolling in secondary and tertiary education. Despite this
progress, there was still a gap between the skills taught in schools and those needed in
the job market, particularly in high-tech and specialized industries.

• Growth in Informal Employment: A large number of young workers were employed in

the informal sector, which often provided lower wages and less job security. Informal
jobs were common in small family businesses, street vending, and casual labor in
construction and services.

Conclusion:
Before the pandemic, Vietnam's youth labor market was characterized by high
participation rates, a shift towards urban and industrial employment, and rising
educational attainment. However, challenges such as informal employment, skill
mismatches, and gender disparities persisted.
 Content.

1. Background Information
1.3. Brief Overview of Vietnam’s Demographics and Labor Market.

• Population Size: Vietnam has a population of

over 100 million people.
Hai Phong City
• Age Distribution: A significant portion of the
Ha Noi City: 8% population is young, with approximately 23%
aged between 15 and 24 years.

• Urbanization: Vietnam is rapidly urbanizing,

with about 37% of the population living in urban
areas. Major cities like Hanoi and Ho Chi Minh
City are economic centers, along with other
Da Nang City significant cities: Hai Phong, Da Nang, Can
Tho,…

• Education: Vietnam has made significant strides

in education, with high literacy rates and
Can Tho City
increasing enrollment in secondary and tertiary
education. However, there are still gaps in skills
that match the labor market demands.
Ho Chi Minh City: 9%

Employment rates GDP Breakdown

7%

37% 33% Agriculture 18% Agriculture

Manufacturing Manufacturing
Services Services
75%
30%

Economic Sectors of Vietnam.

Recent trends and developments.

Foreign Direct Investment (FDI): Vietnam has become a hotspot for FDI, particularly in
manufacturing. Major investors include South Korea, Japan, and Singapore. The country’s
stable political environment, strategic location, and competitive labor costs make it an
attractive destination for foreign investors.
 Content.
2. Impact of COVID – 19 on Youth Unemployment.

2.1. Initial Shock: Lockdowns and Immediate Job Losses.

The COVID-19 pandemic led to widespread lockdowns and immediate job losses. Many
businesses closed temporarily or permanently, resulting in a sharp increase in youth
unemployment. The sudden halt in economic activity left many young people without
income or job security.

2.2. Sectoral Analysis: Which Sectors Were Most Affected?

v Tourism and Hospitality

- Impact: The tourism and hospitality sectors were among the hardest hit. With travel
restrictions and social distancing measures in place, hotels, restaurants, and tourist
attractions saw a dramatic decline in business.
- Youth Employment: Many young people working in these sectors lost their jobs or faced
reduced hours and wages.

v Retail and Services

- Impact: Retail and service industries also suffered significant disruptions. Non-essential
retail stores faced closures, and consumer spending decreased due to economic uncertainty.
- Youth Employment: Young workers in retail, particularly those in part-time or casual roles,
experienced high levels of job loss and instability.

v Manufacturing**
- Impact: Manufacturing was affected by supply chain disruptions and reduced demand for
non-essential goods. Factories faced operational challenges due to health and safety
regulations.
- Youth Employment: Young workers in manufacturing faced layoffs and reduced work
hours, especially in industries like textiles and electronics.

2.3. Short-term vs. Long-term Impacts

- Short-term Impacts: In the short term, the immediate effects of the pandemic included high
unemployment rates, reduced income, and increased economic vulnerability for young
workers.
- Long-term Impacts: Long-term impacts could include skill erosion due to prolonged
unemployment, increased competition for fewer job opportunities, and potential shifts in
career paths as young people adapt to changing market demands. The pandemic may also
accelerate trends like digital transformation and remote work, affecting future employment
landscapes for youth.
 Content.
3. Government Response
3.1. Overview of Government Policies and Initiatives

The Vietnamese government implemented a range of policies and initiatives to mitigate the
economic impact of COVID-19 and address rising youth unemployment. These measures
aimed to support businesses, protect jobs, and provide financial assistance to those affected.

3.2. Financial Aid and Job Support Programs

- Financial Aid: The government rolled out financial aid packages to support businesses and
workers. These included tax deferrals, reduced interest rates on loans, and direct cash
transfers to affected individuals and households.

- Job Support Programs: Initiatives were launched to create job opportunities and provide
training for unemployed youth. Programs focused on reskilling and upskilling to help young
people adapt to new market demands, particularly in digital and technical fields.
Additionally, there were efforts to promote entrepreneurship and support startups led by
young people.

3.3. Effectiveness of these Measures in Addressing Youth Unemployment

- Short-term Relief: The financial aid and job support programs provided immediate relief
to many young workers, helping them cope with the sudden loss of income and
employment. The cash transfers and tax deferrals allowed businesses to retain employees
and stabilize operations.

- Long-term Impact: While the measures helped reduce the immediate spike in youth
unemployment, the long-term effectiveness depended on sustained economic recovery and
continued support for job creation. The reskilling and upskilling programs were crucial in
equipping young people with the skills needed for a post-pandemic economy, particularly in
sectors experiencing growth such as IT and e-commerce.

- Challenges: Despite these efforts, challenges remained in reaching all affected youth,
particularly those in informal employment or rural areas. Ensuring that support was evenly
distributed and effectively targeted was critical for the overall success of the initiatives.

- Overall, the government's response played a significant role in mitigating the

impact of COVID-19 on youth unemployment. However, ongoing efforts and
adaptations were necessary to address the evolving challenges and ensure long-
term employment stability for Vietnam’s young workforce.
 Content.
4. Challenges and Barriers
4.1. Educational Disruptions and Their Impact on Job Market Entry

- Impact of School Closures: The COVID-19 pandemic led to widespread school closures,
disrupting the education of millions of young people. Remote learning became the norm,
but not all students had equal access to the necessary resources and technology.
- Skill Development: Practical training and hands-on learning opportunities were
significantly reduced, affecting the development of essential skills needed for the job
market.
- Delayed Graduations: Delays in educational timelines led to postponed graduations,
further delaying young people's entry into the workforce. This created a backlog of job
seekers, intensifying competition for available positions.

4.2. Digital Divide and Access to Remote Work Opportunities

- Unequal Access to Technology: The shift to remote work and online education highlighted
the digital divide in Vietnam. Many young people, particularly in rural areas, lacked access
to reliable internet and digital devices.
- Opportunities Limited by Connectivity: Those without adequate digital access were unable
to take advantage of remote work opportunities, online job applications, and virtual training
programs. This disparity exacerbated existing inequalities in the labor market.
- Skills Gap: Even among those with access to technology, there was a gap in digital literacy
and skills. Many young people were unprepared for the demands of a digital workplace,
limiting their employment prospects.

4.3. Mental Health Issues Related to Unemployment

- Psychological Impact of Job Loss: Unemployment can lead to significant stress, anxiety,
and depression. The uncertainty and financial strain caused by job loss during the pandemic
took a toll on the mental health of many young people.
- Isolation and Lack of Social Support: Lockdowns and social distancing measures reduced
social interactions and support networks. The isolation compounded the mental health
challenges faced by unemployed youth.
- Barriers to Mental Health Services: Access to mental health services was limited,
especially in rural areas. Stigma around mental health issues further prevented many young
people from seeking the help they needed.

- Addressing these challenges and barriers is crucial for supporting Vietnam's

young workforce. Efforts to bridge the digital divide, improve access to mental
health services, and ensure educational continuity will be essential for
mitigating the long-term impacts of the pandemic on youth employment.
 Content.
5. Future Outlook

5.1. Predicted Trends in Youth Unemployment Post-Pandemic

- Gradual Recovery: As the economy recovers from the pandemic, youth unemployment
rates are expected to gradually decrease. However, the pace of recovery may vary across
different sectors and regions.
- Sectoral Shifts: There will likely be a continued shift in employment from traditional
sectors like tourism and hospitality to emerging sectors such as technology, digital services,
and e-commerce. Youth will need to adapt to these changes by acquiring relevant skills and
qualifications.
- Job Market Competition: The job market may become more competitive, with a backlog
of job seekers due to delayed graduations and increased numbers of unemployed youth.
This could lead to temporary underemployment or part-time work as young people seek to
gain experience and secure stable positions.

5.2. Opportunities in Emerging Sectors

- Technology and Digital Services: The tech industry is poised for significant growth,
offering numerous opportunities for young people in areas such as software development,
cybersecurity, data analysis, and digital marketing.
- E-commerce: The rise of online shopping and digital marketplaces presents opportunities
in logistics, customer service, and digital content creation. Young entrepreneurs can also
explore launching their own e-commerce ventures.
- Green Economy: As Vietnam focuses on sustainable development, the green economy will
offer jobs in renewable energy, environmental management, and sustainable agriculture.
Youth with skills in these areas will be in demand.
- Healthcare and Biotechnology: The healthcare sector, bolstered by lessons learned from
the pandemic, will see growth in roles related to public health, medical research, and
biotechnology.
- Remote Work and Freelancing: Remote work is here to stay, providing opportunities for
freelancing and remote job roles across various sectors, including writing, graphic design,
and virtual assistance.

5.3. Recommendations for Policy Makers and Stakeholders

- Enhance Education and Training: Invest in education and training programs that align with
current and future market needs. This includes vocational training, digital literacy programs,
and continuous professional development opportunities.
- Support Youth Entrepreneurship: Create an enabling environment for youth
entrepreneurship by providing access to funding, mentorship, and business development
services. Encourage innovation and startup culture among young people.
 Conclusion.
The COVID - 19 pandemic had a significant impact on youth unemployment in Vietnam.
The initial shock of lockdowns had led to widespread job losses, with sectors such as
tourism, hospitality, and retail being hardest hit. The shift to remote work and the rapid
growth of e-commerce and digital services presented new opportunities but also highlighted
the digital divide and the need for improved digital skills among young people. Government
and community responses, including financial aid, job support programs, and digital literacy
initiatives, provided critical support to mitigate the immediate impacts. However, challenges
such as economic uncertainty, skill mismatches, and mental health issues persisted. Looking
ahead, the recovery of the youth labor market will depend on continued efforts to enhance
education and training, support youth entrepreneurship, expand digital infrastructure, and
promote inclusive policies. Emerging sectors like technology, e-commerce, the green
economy, and healthcare offer promising opportunities for young job seekers.

The immediate response to the pandemic involved strict lockdowns and social distancing
measures, which led to significant economic disruptions and widespread job losses. Young
people, who were already vulnerable in the job market, found themselves disproportionately
affected. Sectors such as tourism, hospitality, and retail, which traditionally employ many
young workers were among the hardest hit. Businesses in these areas faced prolonged
closures and reduced customer demand, resulting in a surge in youth unemployment.

At the same time, the pandemic accelerated the shift to remote work and the rapid growth of
e-commerce and digital services. While these changes presented new opportunities for
employment, they also highlighted the existing digital divide. Many young people lacked
the necessary digital skills and access to technology to take advantage of remote work
opportunities. In response to the crisis, both government and community organizations
stepped up with various support measures. Despite these interventions, significant
challenges persisted. Economic uncertainty continued to loom, skill mismatches remained a
barrier to employment, and the mental health toll of prolonged unemployment was a
growing concern.
Looking ahead, the recovery of the youth labor market in Vietnam will depend on efforts.
Enhancing education and training systems to better align with market needs is also
significant. This includes not only traditional education but also vocational training and
continuous learning opportunities for young people to adapt to the rapidly changing job
landscape. Supporting youth entrepreneurship through funding, mentorship, and business
development resources can also play an important role in creating new job opportunities and
driving economic growth.. Additionally, increasing access to mental health services and
support will help address the psychological impacts of unemployment and promote overall
well-being.
 References.

World Bank Vietnam Overview

Provides comprehensive data and analysis on Vietnam’s economic
performance and sector contributions.

General Statistics Office of Vietnam (GSO)

Official statistics on various economic indicators, including GDP
contribution by sector and labor force data.

Asian Development Bank (ADB)

Offers economic data, sector analysis, and information on key
development projects in Vietnam.

International Monetary Fund (IMF)

Reports Provides reports and data on Vietnam’s economic outlook and
sector-specific performance.

United Nations Development Programme

Offers insights into economic development, employment trends, and
social indicators. Vietnam Ministry of Planning and Investment