afd/notes/vietnam/2208141732_literature.md

Research Vietnam

• focus on:
  • income inequality, based on bottom 40%, Gini coefficient, other inequality measures
  • focus on: Vietnam varation in incidence of catastrophic weather events (e.g. floodings) and unequal impact of these events on households

Literature

Benjamin2017 - Growth with Equity: Income Inequality in Vietnam, 2002–14

• economic/trade liberalization reforms:

  • Enterprise Law (2000)
  • US-Vietnam Bilateral Trade Agreement (2001)
  • accession to WTO (2007)

• tightly integrated in international economy:

  • rising inflows of FDI
  • increased trade-to-GDP ratio

• economic shifts:

  • ongoing shift of GDP/labor from agriculture to manufacturing/services [@Cling2009; @McCaig2013; @McCaig2014; @McCaig2015]
  • sustained high rates of overall economic growth
  • even throughout 2008+ (with declining external demand, tightening monetary/fiscal policies) (real) GDP per capita grew 5.1% annually
  • similar trajectory to China - even more remarkable rates of growth over a longer period of time but at cost of higher inequality

• marked reduction in absolute poverty in country

  • rate of decline slowed somewhat since mid-2000s [@WorldBank2013; @VASS2006; @VASS2011]
  • some decline can be directly attributed to liberalization of markets instead of growth more generally [@McCaig2011; @Benjamin2004; @Edmonds2006]

• inequality in Vietnam is largely intersectional between ethnicity, regional situation, and a strong rural-urban divide

  • persistent poverty severe among ethnic minorities [@Baulch2012]
    • [@WorldBank2013; Baulch2012; vandeWalle2001; vandeWalle2004]
  • consumption inequality since early 1990s has been relatively constant, moving within narrow range
  • income inequality markers werwe (and are) significantly higher than consumption measures, but dropped sharply in the 1990s
    • flattening off in 2000s
  • robust grwoth in agricultural incomes were and continue to play an important role in moderating inequality increases (through other sources of income) [@Benjamin2004]

• looks at income growth and inequality over time (2002-2014) and importantly the income sources

  • "The decompositions allow us to identify the income sources, and thus markets, that underlie Vietnam's particular experience of structural change, growth, and distribution of income." [27]
  • construction household per capita income, including a moderate grwoth slow-down in 2010.
  • overall small income inequality decrease in Vietnam (2002-2014)
    • suggests growth has been accompanied by equity extending beyond poverty reduction
    • rural inequality slightly increased, urban decreased
      • rural driven by slow income grwoth among ethnic minorities - a growing proportion of population
      • incomes of minorities rose, but gap to ethnic majority still widened
    • but offset by decreased urban-rural inequality
  • decomposition insights:
    • farm incomes remain "important, relatively equalizing source of opportunity for rural households"" [27]
    • growth of wage income driven by rising earnings among wage-workers more than increased participation in wage labor
  • sampled stratified into
    • households, communes, districts, provinces, regions

While in 2002 the ethnic minority population living in rural areas was below 15% in 2002, it rose to over 18% in 2014 - both due to higher fertility among minorities and ethnic majority Kinh urbanizing at a higher rate - and the ratio of Kinh to minority incomes rose to more than 2.0 in 2014 [@Benjamin2017]. The same study finds that income inequality rose even more sharply within ethnic minorities, while that of rural Kinh, though increasing from 2002 to 2014, fell back to 2002 levels around 2014. These findings suggest that the primary drivers of rural income inequality are a growing gap between Kinh and minorities while at the same time a similar rising inequality develops among minority rural populations themselves.

• structural income composition: [41]
  • 2002
    • family business & wage income main drivers of income inequality (overall) (>60%) (account for higher share of inequality than income)
    • crop and agricultural sidelines income is relatively equalizing (account for lower share of inequality than income)
    • Gini coefficient: wage and family business very unequally distributed; also remittances and 'other incomes' also unequal but overall small share means they have lower impact
  • 2014:
    • wage income now 42% of total income (30.5% 2002), less unequally distributed, suggesting a labor market that is both more prevalent and more equally distributed
    • however, still majorly correlated with overall income thus driver of inequality (as are remittances)
    • overall, points to labor markets and wage labor opportunities as driver of equality during high growth BUT this is for overall population, not rural/minority population
• location inequality:
  • fallen dramatically, inequality increasingly within-location outcome, less due to differences between locations
  • primarily due to migration across locations
  • true for differences between urban/rural within/between provinces

Overall: - slight reduction of of inequality through reduction in influence of wage labor on inequality while existing within-rural inequalities, those between Kinh and minorities, and those within minorities are further pushed apart.

Bui2019 - Determinants of Rural-Urban Inequality in Vietnam: Detailed Decomposition Analyses Based on Unconditional Quantile Regressions

• examines determinants of rural-urban gap of household welfare in Vietnam through detailed decomposition analyses (consumption inequality) 2008-2012

• basic education primary factor being beneficial to rural poort and ethnic minorities (in improving living standards)

• remittances improve rural welfare but do not help reducing within or between-inequality

• policy should ensure easy education access and support for self-employed to raise and stabilize income (instead of wage work, see @Benjamin2017)

• other studies on income inequality [@Imai2011; Imbert2011; Takahashi2007; vandeWalle2001]

  • most have tendency to mask within-group heterogeneity
  • e.g. within rural area there is high degree of heterogeneity depending on geographic characteristics (remoteness) or cultural factors [@Cao2008]

• previous studies on urban-rural expenditure:

  • @Thu2014 - urban-rural inequality continued to increase over years due to both covariate effects and returns to those covariate effects
    • in 90s until 2002, but marginally decreased 2002-2006 [also @Fritzen2005]
  • @Nguyen2007 - welfare disparity mainly explained by impact of structural effects
    • return to education, ethnicity, agricultural activies dramatically changed from 93-98
    • return to education improved the most
    • -> suggested development policy had urban bias (better education, more likely to benefit from economic reform)
    • confirmed by @Fesselmeyer2010 - Theil Index decomposition found period inequality within rural-urban sectors remained stable but between inequality increased 61.9%
  • @Cao2008 - within-gap for 2002-2004
  • this study builds upon their insights and uses reweighted regressions to arrive at rebust results

• in 90s widening gap between urban and rural

  • in last decade mostly within-group disparity (due to number of salaried workers in households within each sector)

• in 2000s within-group inequality including regional, rural-urban, ethnic, gender increased/newly analyzed

Doi Moi policies: controlling credit growth, reducing subsidies to state-owned enterprises, besides opening economy to international trade

results:

• urban-rural gap increasing in 2010, decreasing afterwards
• effects of primary&secondary education on expenditure have become more positive across distribution in rural sector in recent years
  • -> suggests welfare inequality results from inequality in opportunity to improve human capital (agrees with @Thu2014)
• thus, with within inequality as main overal inequality contributor, and large proportion of uneducated heads of households in rural sectors, facilitating education access for disadvantaged groups (poor households and ethnic minorities) would narrow gap within and between
  • higher education widens inequality gap again (between&within)
  • low social mobility among rural poor
    • e.g. they do not get the same social insurance as urban residents

WorldBank2013

• marked reduction in absolute poverty in country
  • rate of decline slowed somewhat since mid-2000s [@WorldBank2013; @VASS2006; @VASS2011]
  • some decline can be directly attributed to liberalization of markets instead of growth more generally [@McCaig2011; @Benjamin2004; @Edmonds2006]
• inequality in Vietnam is largely intersectional between ethnicity, regional situation, and a strong rural-urban divide
  • persistent poverty severe among ethnic minorities [@Baulch2012]
• focuses on consumption inequality

Descriptive statistical analysis ideas

real GDP per capita growth rate (see @Benjamin2017, fn.1)