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Urban poverty in Vietnam: Determinants and policy implications

The paper is structured into 6 sections. Section 2 analyzes the main characteristics of the urban poor. Section 3 examines factors determining poverty, income and consumption expenditure in Hanoi and HCM city. Section 4 presents the analysis of dynamic poverty. Income inequality is analyzed in section 5. Finally, section 6 concludes. | M PRA Munich Personal RePEc Archive Urban Poverty in Vietnam: Determinants and Policy Implications Cuong Nguyen Viet and Linh Vu Hoang and Thang Nguyen 10. December 2010 Online at http://mpra.ub.uni-muenchen.de/40767/ MPRA Paper No. 40767, posted 20. August 2012 23:25 UTC Urban Poverty in Vietnam: Determinants and Policy Implications Nguyen Viet Cuong Vu Hoang Linh Nguyen Thang1 Abstract2 This study examines the profile and determinants of poverty in the two largest cities in Vietnam – Hanoi and Ho Chi Minh. Data used in this study are from the 2009 Urban Poverty Survey. Using the poverty line of 12,000 thousand VND/year, the poverty incidence is estimated at 17.4 percent for Hanoi and 12.5 percent for Ho Chi Minh (HCM) city. There is a large proportion of the poor who are found stochastically poor. Hanoi has higher rates of structurally poverty than HCM city. The proportion of structurally poor and stochastically non-poor is rather small. Overall, the poor have fewer assets than the nonpoor. The poor also have poorer housing conditions, especially they have much lower access to tap water than the non-poor. Heads of the poor households tend to have lower education and unskilled works than the heads of the non-poor households. Keywords: Urban poverty, income, expenditure, household survey, Vietnam. 1 Nguyen Viet Cuong and Vu Hoang Linh from Indochina Research & Consulting (IRC); Nguyen Thang from the Center for Analysis and Forecast, Vietnam. Contact email: cuongnguyen@irc.com.vn; linhnguyen@irc.com.vn ; and nguyenthang98@yahoo.com 2 This study is carried out with financial supports from the United Nations Development Programme in Vietnam. We would like to thank Nguyen Tien Phong, Nguyen Bui Linh, and Alex Warren-Rodriguez from UNDP, Tran Ngo Thi Minh Tam from Center for Analysis and Forecast, Vietnam for their help and comments. 1 1. Introduction Vietnam is an example of a country where broad-shared economic growth has been prevailing in the 1990s and