The Impact of Education on Household Income in Rural Vietnam

Hung Van Vu

doi:10.3390/ijfs8010011

Abstract

Using data from the 2018 Vietnam Household Living Standard Survey, our study investigates the impact of education on household income in rural Vietnam. Both mean and quantile regression analyses were employed to analyze the impact of education. We found that education has a positive effect on the household income after controlling for various factors in the models. However, quantile regression analysis reveals that the effect of schooling years increases with quantiles, suggesting that education bring higher returns for richer households. We also found that households with the heads having higher qualifications or vocational education tend to earn higher income levels. Combined together, these findings imply that while education was found to increase household income, it increases income inequality in rural Vietnam. Our research findings suggest that improving the access of poor households to better education is expected to increase their income and reduce inequality in rural Vietnam.

Highlights

Vietnam’s socio-economic development has generally been considered a success story
We found that education has a positive effect on household income, after controlling for other factors in the models
This study investigated the effect of household income in rural Vietnam using both mean and quantile regression approach, which allows parameters to vary across income groups

Summary

Introduction

Vietnam’s socio-economic development has generally been considered a success story. Over the past three decades, the country moved from one of the poorest countries in the world to a lower-middle income country, with per capita income of 1130 per annual by the end of 2010 (Tien 2014). Education has played as a major factor in the country’s development attainment. Offering a pathway out of poverty, education has provided the workforce with vital skills to convert a farming-based economy into an industrial-based one. This success stems from the fact that education has been considered as a top-priority policy in Vietnam (Tien 2014). The country has attained great achievements in universalizing primary and lower secondary education. Student loans have been given for tertiary education

Methods

Results

Conclusion