This study examines the determinants of nonfarm participation and the effect of nonfarm employment on household income among ethnic minorities in the Northwest Mountains, Vietnam. The logistic regression analysis shows that education and the availability of local enterprises or trade villages, notably among other factors, have a significantly increasing impact on the likelihood of taking up wage employment, while the presence of paved roads gives households more chance to engage in nonfarm self-employment. | Economic Research-Ekonomska Istraživanja, 2015 Vol. 28, No. 1, 727–740, Nonfarm employment and household income among ethnic minorities in Vietnam Tuyen Quang Tran* Faculty of Political Economy, VNU University of Economics and Business, Vietnam National University, Hanoi, Room 100, Building E4, No 144, Xuan Thuy Street, Cau Giay District, Hanoi, Vietnam (Received 22 February 2015; accepted 25 August 2015) This study examines the determinants of nonfarm participation and the effect of nonfarm employment on household income among ethnic minorities in the Northwest Mountains, Vietnam. The logistic regression analysis shows that education and the availability of local enterprises or trade villages, notably among other factors, have a significantly increasing impact on the likelihood of taking up wage employment, while the presence of paved roads gives households more chance to engage in nonfarm self-employment. Using a propensity score matching analysis, the study found that households that participated in wage or nonfarm self-employment have higher levels of per capita income than those without nonfarm employment. The findings imply that nonfarm employment offers a pathway out of poverty for ethnic minorities. Keywords: ethnic minorities; nonfarm participation; propensity score matching; North-West; Vietnam JEL classification: I32; O12; J15 1. Introduction Vietnam has 54 distinct ethnic groups; each with its own language, lifestyle and cultural heritage. The most populous group is ‘Viet’ or ‘Kinh’, which accounts for 86% of the country’s population (Tung & Trang, 2014). The majority of this group lives in inland deltas and coastal areas and enjoys higher living standards than ethnic minority groups. ‘Hoa’ or the Chinese group is a relative rich group that also resides in inland deltas and coastal areas (Imai, Gaiha, & Kang, 2011). The other 52 ethnic minority groups reside in upland and mountainous areas, ranging from the
