A question arises why women are poorly remunerated especially in the informal wage sector. A potential explanation is that jobs in the latter sector tends to involve work of a low-skilled or elementary nature,<sup>32</sup> and physical strength may matter more in such jobs than in factory employment or more mental-labor intensive jobs (e.g., Fan and Lui, 2003; Galor and Weil, 1996; Goldin and Sokoloff, 1982).<sup>33</sup> For instance, using agricultural wage data available in the _Vietnam Living Standard Survey_ (VLSS) 1998, Brassard (2004) finds that the wage gap between genders is particularly high for physically demanding work, such as land preparation and crop harvesting. Following Fan and Lui (2003), I ran four separate Mincerian regressions by ownership categories for Vietnam assuming that the coefficient estimates of the female dummy captures the unexplained part of the gender gap. The results reveal that, controlling for personal and other characteristics, the gender gap is largest in the informal wage sector as the average female worker earns about 23.6 percent lower wages relative to her male counterpart. The gender gaps are found to be about 15.0 percent for foreign and domestic private sectors. Other things equal, disproportionately drawing women from the low-wage informal sector (where the gender gap is very large) to a higher wage sector, the EPZ has the potential to contribute to narrowing the gender gap (Glick and Roubaud, 2006). 32 The largest sources of informal wage employment for males were construction (36 percent), agriculture/forestry/fishery (27 percent) and transportation (7 percent) whereas those for females were agriculture/forestry/fishery (37 percent), other services (10 percent) and sales (9 percent) in 2004 (the VHLSS 2004).

33 Some economists relate the evolution of relative wages of females to women’s changing comparative advantage as economies develop (Fan and Lui, 2003; Galor and Weil, 1996; Goldin and Sokoloff, 1982). They argue that when economic structure changes, rewarding the attributes in which women have a comparative advantage, this in turn leads to a narrowing gender gap in wages. The common assumption in the literature is that men are relatively better endowed for their performance of physical labor whereas men and women are equally endowed for mental labor. Thus, females have a comparative advantage in sectors which require less physical labor. A historical illustration which supports this view may be found in the early stages of industrialization in the U.S.. Goldin and Sokoloff (1982) argue that rising demand for unskilled labor in manufacturing during the first half of the nineteenth century in the U.S., in particular in female-intensive manufacturing such as was found in the cotton and wool textile industries, drew female workers from agriculture (where women had less comparative advantage), and that both the relative wage of females and labor force participation rates for females increased during the same period. Fan and Lui (2003) develop a model focusing on different endowments in physical labor and mental labor in determining occupational choices and show that the gender gap is smaller in occupations and industries in which physical labor is less intensively used. Using the 1981 and 1991 Hong Kong population censuses, Fan and Lui (2003) suggest that the reduction in the gender gap in Hong Kong SAR, China during this period is attributable to its structural change from a manufacturing- to a service-oriented economy in favor of women’s comparative advantage. Running Mincerian earnings equations separately on the subsets of industrial sectors, they show that gender gaps were much larger in primary and manufacturing sectors (where physical labor is more intensively used) than in service sectors, which are more mental labor intensive.

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