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Script
Vietnam's economy is now firmly in the third decade of ongoing economic reform (Doi Moi) as a market-based economy, which lead to remarkable growth phases through opening the economy to international trade while, seen over the bulk of its population, attempting to keep inequality rates managed through policies of controlling credit and reducing subsidies to state-owned enterprises [@Bui2019].
Early income studies also generally highlighted the important role of agricultural incomes in reducing, or at the very not exacerbating, income inequality [@Benjamin2004].
In the 1990s, as the initial stages of the Doi Moi reform bore fruit with economic growth, the first amplifications of inequalities along new rural-urban boundaries became equally visible. There are two complementary views on the primary dimensions of rural inequalities. On the one hand, the urban-rural divide may be driven by structural effects: the welfare returns to education and agricultural activities changed dramatically from, and with it the requirements on policy adaptations required for stemming inequality. Nguyen et al. [-@Nguyen2007] argue this for the period of 1993-1998, with their findings that income returns to education improved dramatically over this time and arguing through this that suggested development policies had a strictly urban bias --- on the whole they would benefit both from better education and vastly benefit from the restructuring of Vietnam's economy. This view was in turn confirmed when Theil Index decomposition found within-sector inequality remaining largely stable while between-sector inequality rose dramatically [@Fesselmeyer2010]. On the other, Thu Le and Booth [-@Thu2014] argue that the urban-rural inequality continued to increase over the years due to both covariate effects and the returns to those covariate effects.
The gap between urban and rural sectors grew, a gap which would continue to widen until 2002, when within-sector rural inequalities started to become more important for inequalities than those between the sectors [@Fritzen2005; @Thu2014]. In the time of within-sector inequality becoming more pronounced many studies, while important contributions to continued inequality research, had a tendency to mask those inequalities in favor of continued analysis of between-sector trends --- often to the detriment of the high degree of heterogeneity depending on geographic characteristics such as remoteness or cultural factors, as Cao and Akita [-@Cao2008] note. In a recent study, Bui and Imai [-@Bui2019] build on the insights of these viewpoints and also find access to basic education the linchpin of improving rural welfare while its lack combined with economic restructuring precluded many from equal opportunities toward human capital improvement. They found that, as within-sector became more pronounced again after 2010, the large proportion of uneducated heads of households in rural sectors and low social mobility of rural poor combine to increase within-sector inequality while the economy overall changing toward salaried work compounded within-rural and urban-rural disparities. Benjamin et al. [-@Benjamin2017] expand on this over a longer time-frame by decomposing different household income sources underlying Vietnam's structural economic changes. They find that, while there is an overall decrease in income inequality throughout Vietnam between 2002 and 2014 and the urban-rural divide also continued its downward trend, rural inequality indeed increased over this time. Wage income and family business income were the main drivers of overall inequality in 2002 (accounting for over 30% of income but 60% of inequality) and remittances add a small share on top, which, while decreased in effect (risen to 42% of total income), remain majorly correlated with income distributions and thus income inequality. Thus, while the study points to more prevalent and equally distributed labor markets and wage labor opportunities, these effects apply to the overall population and not just within-rural inequalities which, as we will see, are driven in large part by ethnicity, education and environmental factors.
- 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]
Ethnic minorities in Vietnam are distinctly over-represented in poverty in addition to often being left behind in the development process, not least due to being extreme representatives of the economic situation of Vietnam's rural population. Ethnic minority households have a tenuous economic position - and it is deteriorating. 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.
In the same vein as the urban-rural divide, one can argue for structural policy failures which essentially lowered the returns on ethnicity along sectorial dividing lines of education and primary income types [@Nguyen2007].