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Sources of Regional Income Disparity in Rural Vietnam: Oaxaca-Blinder Decomposition

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  • Takahashi, Kazushi

Abstract

This paper investigates determinants of regional income disparity in rural Vietnam, with special emphasis placed on the roles of human capital and land. We apply a decomposition method, suggested by Oaxaca and Blinder. We found that returns to assets rather than endowments, especially those of human capital, are one of the leading factors to account for income differences across regions. We also found that substantial improvements of returns to human capital in the Red River delta region are a driving force to catch up with Mekong River delta region. Unexpectedly, differences in land endowment do not strongly correlate with regional income disparity because better access to land in a region was partially offset by lower returns.

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File URL: http://ir.ide.go.jp/dspace/bitstream/2344/536/3/ARRIDE_Discussion_No.95_takahashi.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 95.

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Date of creation: Mar 2007
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Publication status: Published in IDE Discussion Paper. No. 95. 2007.3
Handle: RePEc:jet:dpaper:dpaper95

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Related research

Keywords: Income inequality; Human capital; Land; Vietnam; Income distribution; Human resources;

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  1. Van der Walle, Dominique & Cratty, Dorothyjean, 2003. "Is the emerging nonfarm market economy the route out of poverty in Vietnam?," Policy Research Working Paper Series 2950, The World Bank.
  2. Van de Walle, Dominique, 1998. "Protecting the poor in Vietnam's emerging market economy," Policy Research Working Paper Series 1969, The World Bank.
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Cited by:
  1. Nguyen, Binh Giang, 2008. "Improving the Foreign Direct Investment Capacity of the Mountainous Provinces in Viet Nam," IDE Discussion Papers 152, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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