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Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam

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Dominique van de Walle

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Abstract

If the gains from investment depend on knowledge, but households cannot hire skills, then poorly educated households will achieve lower returns than educated ones. If the income-poor are less well educated, then they will also have lower returns to investment. The paper tests this argument for the case of irrigation in Vietnam, a setting where existing irrigation can be treated as exogenous at the household level with appropriate controls for the determinants of facility placement. Strong complementarities between household education and irrigation expansion suggest that, unless disparities in education are redressed, reforms will generate an inequitable growth process in Vietnam. Copyright Blackwell Publishing Ltd 2003.

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Article provided by Blackwell Publishing in its journal Review of Development Economics.

Volume (Year): 7 (2003)
Issue (Month): 4 (November)
Pages: 636-653
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Handle: RePEc:bla:rdevec:v:7:y:2003:i:4:p:636-653

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Dominique van de Walle & Dorothyjean Cratty, 2004. "Is the emerging non-farm market economy the route out of poverty in Vietnam?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(2), pages 237-274, 06. [Downloadable!] (restricted)
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  2. Strauss, John & Thomas, Duncan, 1995. "Human resources: Empirical modeling of household and family decisions," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 34, pages 1883-2023 Elsevier. [Downloadable!] (restricted)
  3. Lockheed, Marlaine E & Jamison, Dean T & Lau, Lawrence J, 1987. "Farmer Education and Farm Efficiency: Reply," Economic Development and Cultural Change, University of Chicago Press, vol. 35(3), pages 643-44, April.
  4. Jalan, Jyotsna & Ravallion, Martin, 1998. "Behavioral responses to risk in rural China," Policy Research Working Paper Series 1978, The World Bank. [Downloadable!]
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  5. Minot, Nicholas, 1998. "Generating disaggregated poverty maps," MTID discussion papers 25, International Food Policy Research Institute (IFPRI). [Downloadable!]
  6. Philippe Aghion & Eve Caroli & Cecilia Garcia-Penalosa, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December. [Downloadable!] (restricted)
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  7. Strauss, J. & Thomas, D., 1995. "Empirical Modeling of Household and Family Decisions," Papers 95-12, RAND - Reprint Series.
  8. Ravallion, Martin & Datt, Gaurav, 1999. "When is growth pro-poor? Evidence from the diverse experiences of India's states," Policy Research Working Paper Series 2263, The World Bank. [Downloadable!]
  9. Jimenez, Emmanuel, 1995. "Human and physical infrastructure: Public investment and pricing policies in developing countries," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 43, pages 2773-2843 Elsevier. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Siegel, Paul B., 2005. "Using an asset-based approach to identify drivers of sustainable rural growth and poverty reduction in Central America : a conceptual framework," Policy Research Working Paper Series 3475, The World Bank. [Downloadable!]
  2. Fan, Shenggen & Jitsuchon, Somchai & Methakunnavut, Nuntaporn, 2004. "The importance of public investment for reducing rural poverty in middle-income countries," DSGD discussion papers 7, International Food Policy Research Institute (IFPRI). [Downloadable!]
  3. Dufhues, Thomas & Buchenrieder, Gertrud, 2005. "Outreach of credit institutes and households' access constraints to formal credit in Northern Vietnam," Research in Development Economics and Policy (Discussion Paper Series) 8535, Universitaet Hohenheim, Department of Agricultural Economics and Social Sciences in the Tropics and Subtropics. [Downloadable!]
  4. Mogues, Tewodaj & Ayele, Gezahegn & Paulos, Zelekawork, 2008. "The bang for the birr: Public expenditures and rural welfare in Ethiopia," Research reports 160, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  5. Songco, Jocelyn A., 2002. "Do rural infrastructure investments benefit the poor? Evaluating linkages : a global view, a focus on Vietnam," Policy Research Working Paper Series 2796, The World Bank. [Downloadable!]
  6. Jean-Louis Arcand & Béatrice d'Hombres & Paul Gyselinck, 2005. "Instrument Choice and the Returns to Education: New Evidence from Vietnam," Labor and Demography 0510011, EconWPA. [Downloadable!]
    Other versions:
  7. Lucia Mangiavacchi & Paolo Verme, 2009. "Evaluating Pro-poor Transfers When Targeting is Weak: The Albanian Ndihma Ekonomike Program Revisited," Working Papers Series wp2009_08.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze Economiche. [Downloadable!]
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