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Poverty Dynamics During Trade Reform: Evidence From Rural Vietnam

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  • Patricia Justino
  • Julie Litchfield
  • Hung Thai Pham

Abstract

This paper implements and adapts the conceptual framework developed by Winters (2002) that identifies the transmission mechanisms between trade policy reform and household welfare outcomes. We make use of household panel data from Vietnam collected in two years, 1992-93 and 1997-98 that span the very earliest years of the reform period and its immediate after effects. Poverty dynamics are modeled using changes in consumption expenditure and poverty transition models. The trade effect is captured by a set of variables that are most likely to have an impact on rural poverty, namely prices of staples and employment in the export sector. We show that trade liberalization has a material and positive effect on rural household welfare and this trade effect is largely transmitted to the poor through the labor market channel. Copyright 2008 The Authors. Journal compilation International Association for Research in Income and Wealth 2008.

Suggested Citation

  • Patricia Justino & Julie Litchfield & Hung Thai Pham, 2008. "Poverty Dynamics During Trade Reform: Evidence From Rural Vietnam," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(2), pages 166-192, June.
  • Handle: RePEc:bla:revinw:v:54:y:2008:i:2:p:166-192
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    Cited by:

    1. Buffie, Edward F. & Atolia, Manoj, 2012. "Trade, growth, and poverty in Zambia: Insights from a dynamic GE model," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 211-229.
    2. Le, Minh Son, 2014. "Trade openness and household welfare within a country: A microeconomic analysis of Vietnamese households," Journal of Asian Economics, Elsevier, vol. 33(C), pages 56-70.
    3. Quintero Peralta, María Angélica & Gallardo Cobos, Rosa María & Ceña Delgado, Felisa, 2016. "Implicaciones de la disminución de la capacidad productiva de granos básicos sobre la alimentación en comunidades rurales pobres de México," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 16(2).
    4. Pamela Coke Hamilton & Yvonne Tsikata & Emmanuel Pinto Moreira, 2009. "Accelerating Trade and Integration in the Caribbean : Policy Options for Sustained Growth, Job Creation, and Poverty Reduction," World Bank Publications, The World Bank, number 2652.
    5. Garza-Rodriguez, Jorge & Fernández-Ramos, Jennifer & Garcia-Guerra, Ana K. & Morales-Ramirez, Gabriela, 2015. "The dynamics of poverty in Mexico: A multinomial logistic regression analysis," MPRA Paper 77743, University Library of Munich, Germany.
    6. Emiliano Magrini & Pierluigi Montalbano, 2012. "Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008)," Working Paper Series 3512, Department of Economics, University of Sussex.
    7. Bruno Arpino & Arnstein Aassve, 2014. "The role of villages in households’ poverty exit: evidence from a multilevel model for rural Vietnam," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(4), pages 2175-2189, July.
    8. Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany.
    9. repec:ebl:ecbull:eb-17-00147 is not listed on IDEAS

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