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

25 Pages Posted: 11 Nov 2014

See all articles by Huong Thu Le

Huong Thu Le

Griffith University

Alison L. Booth

Australian National University (ANU) - Research School of Social Sciences (RSSS); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: December 2014

Abstract

We investigate urban–rural inequality in Vietnam using data from the Vietnam Living Standard Surveys between 1993 and 2006. We find that mean per capita expenditure of urban households is consistently twice as much as that of rural households and that the urban–rural gap monotonically increases from the poorer to the richer groups of the expenditure distribution. To isolate factors contributing to the urban–rural gap, we apply the Oaxaca–Blinder type decomposition to a newly developed unconditional quantile regression method. Factors contributing significantly to the high urban–rural gap include inter‐group differences in education, household age structure, labor market activity, geographic location and their related returns, with education playing the most important role. Over the period, consistent with the country's massive rural–urban migration, we find that domestic remittance plays a significant role in shortening the urban–rural expenditure gap in the later years, 2002 and 2006.

Keywords: expenditure distribution, Oaxaca decomposition, unconditional quantile regression, urban–rural inequality, Vietnam

JEL Classification: C13, D31, O18, O53, P21

Suggested Citation

Thu Le, Huong and Booth, Alison L., Inequality in Vietnamese Urban–Rural Living Standards, 1993–2006 (December 2014). Review of Income and Wealth, Vol. 60, Issue 4, pp. 862-886, 2014, Available at SSRN: https://ssrn.com/abstract=2522719 or http://dx.doi.org/10.1111/roiw.12051

Huong Thu Le (Contact Author)

Griffith University

170 Kessels Road
Nathan, QLD 4111
Australia

Alison L. Booth

Australian National University (ANU) - Research School of Social Sciences (RSSS) ( email )

Canberra, Australian Capital Territory 0200
Australia
+61 2 6125 3285 (Phone)
+61 2 6125 0182 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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