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Inequality in Vietnamese Urban-Rural Living Standards, 1993-2006

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  • Le, Huong Thu

    (Australian National University)

  • Booth, Alison L.

    (Australian National University)

Abstract

Using data from five waves of the Vietnam Household Living Standard Survey, we find evidence of significant urban-rural expenditure inequality. Urban-rural inequality in Vietnam increased dramatically from 1993 to 1998, and peaked in 2002 before reducing slightly in 2004, and significantly in 2006. The urban-rural gap also monotonically increases across the expenditure distribution. We use a variant of the Oaxaca-Blinder decomposition method, applied to the unconditional quantile regression method of Firpo, Fortin and Lemieux (2009), to explain the components of the per capita expenditure differentials between urban and rural households at selected quantiles of the distribution. We also compare these estimates with those at mean obtained by OLS. Our results show a number of factors contributing significantly to the high urban-rural gap. These include inter-group differences in education, household demographic structure, industrial structure and their related returns. Adjusting the average characteristics of rural households to those of urban households will reduce about a half of the overall urban-rural expenditure gap. A significant part of the remaining unexplained component lies in the intercept differences; that is, the inter-group differences in other factors not captured in the model that favor urban households.

Suggested Citation

  • Le, Huong Thu & Booth, Alison L., 2010. "Inequality in Vietnamese Urban-Rural Living Standards, 1993-2006," IZA Discussion Papers 4987, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp4987
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    Cited by:

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    2. Joanna Landmesser, 2016. "Decomposition of differences In income distributions Using quantile regression," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 17(2), pages 331-348, June.
    3. Thanh P. Bui & Katsushi S. Imai, 2019. "Determinants of Rural-Urban Inequality in Vietnam: Detailed Decomposition Analyses Based on Unconditional Quantile Regressions," Journal of Development Studies, Taylor & Francis Journals, vol. 55(12), pages 2610-2625, December.
    4. Zheng Fang & Chris Sakellariou, 2016. "Social Insurance, Income and Subjective Well-Being of Rural Migrants in China—An Application of Unconditional Quantile Regression," Journal of Happiness Studies, Springer, vol. 17(4), pages 1635-1657, August.
    5. Azam, Mehtabul, 2019. "Accounting for growing urban-rural welfare gaps in India," World Development, Elsevier, vol. 122(C), pages 410-432.
    6. Raaj Kishore Biswas & Enamul Kabir & Hafiz T. A. Khan, 2019. "Causes of Urban Migration in Bangladesh: Evidence from the Urban Health Survey," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 38(4), pages 593-614, August.
    7. Azam, Mehtabul, 2017. "Are Urban-Rural Welfare Differences Growing in India?," IZA Discussion Papers 11174, Institute of Labor Economics (IZA).
    8. Phuc Phan & Martin O’Brien, 2019. "Multidimensional Wellbeing Inequality in a Developing Country: A Case Study of Vietnam," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(1), pages 157-183, August.
    9. Raymundo Campos & Gerardo Esquivel & Nora Lustig, 2012. "The Rise and Fall of Income Inequality in Mexico, 1989–2010," Working Papers 267, ECINEQ, Society for the Study of Economic Inequality.
    10. Joanna Małgorzata Landmesser, 2016. "Decomposition Of Differences In Income Distributions Using Quantile Regression," Statistics in Transition New Series, Polish Statistical Association, vol. 17(2), pages 331-348, June.
    11. Ha Trong Nguyen, 2015. "The evolution of the gender test score gap through seventh grade: New insights from Australia using quantile regression and decomposition," Bankwest Curtin Economics Centre Working Paper series WP1507, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    12. repec:unu:wpaper:wp2012-10 is not listed on IDEAS
    13. Hai-Anh H. Dang & Paul W. Glewwe, 2018. "Well Begun, but Aiming Higher: A Review of Vietnam’s Education Trends in the past 20 Years and Emerging Challenges," Journal of Development Studies, Taylor & Francis Journals, vol. 54(7), pages 1171-1195, July.
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    15. Narges Ebadi & Davod Ahmadi & Ibrahim Sirkeci & Hugo Melgar-Quiñonez, 2018. "The Impact of Remittances on Food Security Status in the Global South," Remittances Review, Transnational Press London, UK, vol. 3(2), pages 135-150, October.

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    More about this item

    Keywords

    urban-rural inequality; unconditional quantile regression; Vietnam; Oaxaca decomposition;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General

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