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The Impact of Public Transfers on Poverty and Inequality: Evidence from rural Vietnam

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  • Nguyen, Cuong
  • Van den Berg, Marrit

Abstract

Vietnam’s extensive social security system is claimed to have played a key role in the extraordinary poverty decline over the past decades. This claim is, however, not substantiated by empirical evidence. In this study, we investigate how well contributory pensions and social allowances reached the poor and to which extent these transfers affected poverty and inequality in the early 2000s. Using fixed-effect regression to avoid endogeneity bias and allowing for different effects of different types of transfers, we find that the impact of these transfers on poverty and inequality was low, due to low coverage of poor and relatively low amounts transferred to the poor. Contrary to studies for other countries, our estimates suggest that public transfers did not crowd out private transfers nor did they result in a decrease in work effort. We do find weak evidence for multiplier effects for social transfers, but not for pensions.

Suggested Citation

  • Nguyen, Cuong & Van den Berg, Marrit, 2009. "The Impact of Public Transfers on Poverty and Inequality: Evidence from rural Vietnam," MPRA Paper 48671, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:48671
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    References listed on IDEAS

    as
    1. Jensen, Robert T., 2004. "Do private transfers 'displace' the benefits of public transfers? Evidence from South Africa," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 89-112, January.
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    5. John Farrington & Rachel Slater, 2006. "Introduction: Cash Transfers: Panacea for Poverty Reduction or Money Down the Drain?," Development Policy Review, Overseas Development Institute, vol. 24(5), pages 499-511, September.
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    7. Sadoulet, Elisabeth & Janvry, Alain de & Davis, Benjamin, 2001. "Cash Transfer Programs with Income Multipliers: PROCAMPO in Mexico," World Development, Elsevier, vol. 29(6), pages 1043-1056, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Pensions; social transfers; poverty; inequality; household welfare; Vietnam.;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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