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Does urbanization reduce rural poverty? Evidence from Vietnam

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  • Arouri, Mohamed
  • Ben Youssef, Adel
  • Nguyen, Cuong

Abstract

This paper uses data from household surveys to contribute to the urbanization-poverty nexus literature by assessing the effect of urbanization on income, expenditure, and poverty in rural households in Vietnam. We find that the urbanization process stimulates the transition from farm to non-farm activities in rural areas. More specifically, urbanization tends to reduce farm income and increase wages and non-farm income in rural households. This suggests that total income and consumption expenditure of rural households are more likely to increase with urbanization. Finally, we find also that urbanization helps decrease the expenditure poverty rate of rural households, albeit by a small magnitude.

Suggested Citation

  • Arouri, Mohamed & Ben Youssef, Adel & Nguyen, Cuong, 2017. "Does urbanization reduce rural poverty? Evidence from Vietnam," Economic Modelling, Elsevier, vol. 60(C), pages 253-270.
  • Handle: RePEc:eee:ecmode:v:60:y:2017:i:c:p:253-270
    DOI: 10.1016/j.econmod.2016.09.022
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    Cited by:

    1. Verwimp Philip & Zhang Sisi, 2018. "The welfare impact of Viet Nam’s national target programme ‘building a new countryside’: A quasi-experimental evaluation," WIDER Working Paper Series 164, World Institute for Development Economic Research (UNU-WIDER).
    2. repec:eee:forpol:v:95:y:2018:i:c:p:1-9 is not listed on IDEAS

    More about this item

    Keywords

    Urbanization; Rural poverty; Impact evaluation; Household surveys; Vietnam;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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