Urban poverty in Vietnam: determinants and policy implications

Purpose - The objective of the paper is to examine the profile and determinants of urban poverty in the two largest cities in Vietnam – Hanoi and Ho Chi Minh. The paper also investigates the dynamic aspect of urban poverty in Vietnam. Design/methodology/approach - The authors use regression and data from the 2009 Urban Poverty Survey to examine the determinants of poverty in Vietnam. To analyse the poverty dynamics, an approach by Carter and May is used to decompose poverty into structural and stochastic poverty. Findings - Using the poverty line of 12,000 thousand VND/person/year, the poverty incidence is estimated at 17.4 percent for Hanoi and 12.5 percent for Ho Chi Minh (HCM) City. There is a large proportion of the poor who are found stochastically poor. Hanoi has higher rates of structural poverty than HCM City. The proportion of structurally poor and stochastically non‐poor is rather small. Overall, the poor have fewer assets than the non‐poor. The poor also have poorer housing conditions, especially substantially lower access to tap water than the non‐poor. Heads of the poor households tend to have lower education and unskilled work than the heads of the non‐poor households. Originality/value - In cities of Vietnam, a large proportion of the poor are found stochastically poor.