Growth in Vietnam, 2004-2012: Who Has Benefitted Most?
Reena Badiani-MagnussonWorld Bank
andLoren Brandt
University of Toronto
Objectives• Look at growth in incomes and distributive outcomes
between 2004-2012 using the VHLSS
• Several key questions:– Where is the growth in incomes coming from?– What is the link between this growth and distributive outcomes? – What role are age, educational background and location playing
in sorting households into the most rapidly growing activities?– Who has been hurt by the post-IFC slowdown?
Preliminary Findings (focus on rural here)
• Ongoing structural change in the economy– Shift from agricultural to non-agricultural– Declining role of family-run businesses, especially participation– Movement into the labor market
• Important role of growth in wage earnings, but segmented• Urban: more highly skilled service sector jobs• Rural: less skilled jobs in manufacturing
• Critical role of labor markets in intermediating flows between agricultural and non-agriculture, and the countryside and the cities
• Rapid manufacturing sector wage growth playing equalizing role in countryside and helping to offset declining role of agriculture; agriculture should not be ignored however
• Geography matters:– Sub-regional differences in rise of manufacturing; – Critical differences between North and South in growth in agriculture
• Education increasingly important, especially at the bottom• Overall, modest rise in inequality: decline in fortunes at the bottom offset by rising
middle
Distribution of Income, Vietnam
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0 20000 40000 60000Income per capita, spatially deflated using Gibson (2012)
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2010
2012
kernel = epanechnikov, bandwidth = 836.7920
Income in 2004, 2010 and 2012
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0 20000 40000 60000Income per capita, spatially deflated using Gibson (2012)
2004
2010
2012
kernel = epanechnikov, bandwidth = 712.7532
Rural Incomes in 2004, 2010 and 2012
Summary: Participation Regressions
• Lower secondary education increases likelihood of working in manufacturing relative to primary or below
• Males/females 15-29 much more likely in mfg• Market access matters for mfg
– Paved road in commune – Distance to towns and cities