Dynamics of Spatial Inequality and Poverty: Evidence from Two Decades of Surveys in Vietnam, 1993-2014

Abstract

This paper verifies the dynamics of spatial inequality and poverty, notably for the bottom 40 percent of the population in Vietnam, during the period of 1993-2014. According to Theil T and Blinder-Oaxaca decompositions, expenditure inequalities of urban-rural and between regions were diverging from 1993 to 2004 along with the urban concentration on economic growth, but they were converging from 2004 to 2014 partly backed by the substantial increase of domestic remittances. Meanwhile, inequalities within areas and regions were continuously diverging from 1993 to 2014, which are likely to reflect the difference in main covariates. The urban-rural expenditure gap is mainly explained by years of education, job sector, and ethnic minority status of the household head, and remittances over the duration. For the determinants of poverty of the bottom 40 percent of the population, years of education, service sector job and remittances, among others, largely and positively explained the dynamics based on the quantile regression estimation results. Ethnic minorities have been still left behind from the benefits of economic growth relative to the majority Kinh–remaining space for policy intervention.