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Poverty Dynamics in Rural Vietnam: Winners and Losers During Reform

Author

Listed:
  • Patricia Justino

    () (Poverty Research Unit at Sussex, Department of Economics, University of Sussex)

  • Julie Litchfield

    () (Poverty Research Unit at Sussex, Department of Economics, Universtity of Sussex)

Abstract

This paper analyses poverty dynamics in Vietnam during the ‘Doi Moi’ renovation period and tries to identify the winners and losers from the economic and trade reform process implemented in Vietnam in the late 1980s. Our results are based on data available for a panel of 3494 rural households interviewed in 1992-93 and 1997-98. We find that movements in and out of poverty between the two periods vary substantially across population subgroups, suggesting that not everyone benefited equally from the process of reform. We model poverty dynamics using a multinomial logit model that explains movements in and out of poverty between the two periods of time in terms of household characteristics, characteristics directly related to the economic reforms and changes in the returns to those characteristics. The results suggest that changes in household poverty status in Vietnam are correlated with geographic location, access to key institutions and infrastructure, the education level of the head and spouse, as well as changes induced by the economic reform. These results are robust to shifts in the poverty line and changes in model specification. The paper forms part of a wider study funded by the UK Department for International Development that examines the impact of trade reform and trade shocks on household poverty dynamics.

Suggested Citation

  • Patricia Justino & Julie Litchfield, 2003. "Poverty Dynamics in Rural Vietnam: Winners and Losers During Reform," PRUS Working Papers 10, Poverty Research Unit at Sussex, University of Sussex.
  • Handle: RePEc:pru:wpaper:10
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    File URL: http://www.sussex.ac.uk/Units/PRU/wps/wp10.pdf
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    References listed on IDEAS

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    1. Yoko Niimi & Puja Vasudeva Dutta & L. Alan Winters, 2015. "Trade Liberalisation and Poverty Dynamics in Vietnam," World Scientific Book Chapters,in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 16, pages 333-365 World Scientific Publishing Co. Pte. Ltd..
    2. Dollar, David, 2002. "Reform, growth, and poverty in Vietnam," Policy Research Working Paper Series 2837, The World Bank.
    3. Dwayne Benjamin & Loren Brandt, 2002. "Agriculture and Income Distribution in Rural Vietnam under Economic Reforms: A Tale of Two Regions," Working Papers benjamin-02-01, University of Toronto, Department of Economics.
    4. Burgess, Simon & Gardiner, Karen & Jenkins, Stephen P. & Propper, Carol, 2000. "Measuring income risk," ISER Working Paper Series 2000-15, Institute for Social and Economic Research.
    5. Baulch, Bob & Truong Thi Kim Chuyen & Haughton, Dominique & Haughton, Jonathan, 2002. "Ethnic minority development in Vietnam : a socioeconomic perspective," Policy Research Working Paper Series 2836, The World Bank.
    6. van de Walle, Dominique & Gunewardena, Dileni, 2001. "Sources of ethnic inequality in Viet Nam," Journal of Development Economics, Elsevier, vol. 65(1), pages 177-207, June.
    7. Glewwe, Paul & Hall, Gillette, 1998. "Are some groups more vulnerable to macroeconomic shocks than others? Hypothesis tests based on panel data from Peru," Journal of Development Economics, Elsevier, vol. 56(1), pages 181-206, June.
    8. Eric Edmonds & Nina Pavcnik, 2002. "Does Globalization Increase Child Labor? Evidence from Vietnam," NBER Working Papers 8760, National Bureau of Economic Research, Inc.
    9. Stephen P. Jenkins, 2000. "Modelling household income dynamics," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(4), pages 529-567.
    10. Minot, Nicholas & Goletti, Francesco, 2000. "Rice market liberalization and poverty in Viet Nam:," Research reports 114, International Food Policy Research Institute (IFPRI).
    11. David O’Connor, 1996. "Labour Market Aspects of State Enterprise Reform in Viet Nam," OECD Development Centre Working Papers 117, OECD Publishing.
    12. L. Alan Winters, 2000. "Trade Liberalisation and Poverty," PRUS Working Papers 07, Poverty Research Unit at Sussex, University of Sussex.
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    Citations

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    Cited by:

    1. Patricia Justino & Philip Verwimp, 2013. "Poverty Dynamics, Violent Conflict, and Convergence in R wanda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(1), pages 66-90, March.
    2. Md. Shafiul Azam & Katsushi S. Imai, 2012. "Measuring Households' Vulnerability to Idiosyncratic and Covariate Shocks – the case of Bangladesh," Discussion Paper Series DP2012-02, Research Institute for Economics & Business Administration, Kobe University.
    3. Montalbano, Pierluigi, 2011. "Trade Openness and Developing Countries' Vulnerability: Concepts, Misconceptions, and Directions for Research," World Development, Elsevier, vol. 39(9), pages 1489-1502, September.
    4. Jones, Nicola & Nguyen, Ngoc Anh & Nguyen, Thu Hang, 2007. "Trade liberalisation and intra-household poverty in Vietnam: a q2 social impact analysis," MPRA Paper 4206, University Library of Munich, Germany.
    5. 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.
    6. Patricia Justino, 2003. "Redistribution, Inequality and Political Conflict," PRUS Working Papers 18, Poverty Research Unit at Sussex, University of Sussex.
    7. Seshan, Ganesh, 2005. "The impact of trade liberalization on household welfare in vietnam," Policy Research Working Paper Series 3541, The World Bank.
    8. repec:dau:papers:123456789/4977 is not listed on IDEAS
    9. Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany.
    10. Ingrid Woolard & Stephan Klasen, 2005. "Determinants of Income Mobility and Household Poverty Dynamics in South Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 41(5), pages 865-897.
    11. Nguyen Viet, Cuong, 2012. "Poverty Dynamics: The Structurally and Stochastically Poor in Vietnam," MPRA Paper 45738, University Library of Munich, Germany.
    12. Nguyen, Anh & Jones, Nicola, 2006. "Vietnam’s Trade Liberalisation: Potential Impacts on Child Well-being," MPRA Paper 1385, University Library of Munich, Germany.

    More about this item

    Keywords

    Poverty dynamics; trade liberalisation; economic reform; panel data; Vietnam.;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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