Economic growth, poverty, and household welfare in Vietnam

W O R L B A N K REGIONAL AND SECTORAL STUDIES

Economic Growth,

Poverty, and

Household Welfare

in Vietnam

EDITED BY

PAUL GLEWWE

NISHA AGRAWAL

DAVID DOLLAR

m

Economic Growth, Poverty, and

Household Welfare in Vietnam

W ORLD BANK

REGIONAL AND

SECTORAL STUDIES

Economic Growth, Poverty, and

Household Welfare in Vietnam

Edited by

Paul G lew w e

N isha Agraw al

D avid D ollar

THE WORLD BANK

W ashington, D.C.

© 2004 The International Bank for Reconstruction

and Development/THE w o r l d b a n k

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ISBN 0-8213-5543-0

Cover credits: World Bank Photo Library

Library of Congress Cataloging-in-Publication Data

Economic growth, poverty, and household welfare in Vietnam / edited bv Paul

Glewwe, Nisha Agrawal, David Dollar.

p. cm. - (World Bank regional and sectoral studies)

Includes bibliographical references and index.

ISBN 0-8213-5543-0

1. Vietnam—Economic policy. 2. Income distribution—Vietnam. 3. Poverty—

Vietnam. 4. Households—Economic aspects—Vietnam. 5. Vietnam— Economic

conditions— 1975- I. Glewwe, Paul, 1958- II. Agrawal, Nisha. III. Dollar, David.

IV. Series.

HC444.E263 2004

330.9597—dc22 2 0 0 3 0 5 6 8 8 7

Contents

Forew ord................................................................................................................................... vii

A ck n ow led gm en ts................................................................................................................ix

C o n trib u to rs............................................................................................................................xi

A bbreviations and A cro n y m s......................................................................................xiii

M ap of V ietn am ...................................................................................................................xvi

1. An O verview of Econom ic G row th and H ousehold W elfare

in Vietnam in the 1 9 9 0 s ......................................................................................1

Paul Glewwe

Part I. Vietnam's Economic Performance in the 1990s.................27

2. Reform , G row th, and Poverty ..........................................................................29

David Dollar

3. The W age Labor M arket and Inequality in Vietnam ......................... 53

John Luke Gallup

4. H ousehold Enterprises in V ietnam : Survival, G row th,

and Living Stand ard s.........................................................................................95

W im P. M . Vijverberg and Jonathan H aughton

5. A griculture and Incom e D istribution in Rural Vietnam

u nder Econom ic R eform s: A Tale of Two R egions ....................... 133

D w ayne Benjamin and Loren Brandt

v

Part II. Poverty Reduction in Vietnam in the 1990s .................

6. The Static and Dynam ic Incidence of V ietnam 's Public

Safety N e t..............................................................................................................189

Dom inique van de Walle

7. The Spatial D istribution of Poverty in Vietnam and the Potential

for Targeting..........................................................................................................229

N icholas M inot and Bob Baulch

8. Ethnic M inority D evelopm ent in Vietnam : A Socioeconom ic

P ersp ectiv e.............................................................................................................273

Bob Baulch, Truong Thi Kim C huyen, D om inique H aughton,

and Jonathan Haughton

Part III. Progress in Health and Education in Vietnam

in the 1990s 312

9. Poverty and Survival Prospects of V ietnam ese Children

under Dot M o i...................................................................................................... 313

A dam W agstaff and N ga N guyet N guyen

10. Child N utrition, Econom ic G row th, and the Provision

of Health Care Services in V ie tn a m ....................................................... 351

Paul Gleurwe, Stefanie Koch, and Bui Linh N guyen

11. Patterns of H ealth Care U se in Vietnam : A nalysis of 1998 Vietnam

Living Standards Survey D a ta ....................................................................391

Pravin K. Trivedi

12. Trends in the Education S e cto r.........................................................................425

Nga N guyet N guyen

13. An Investigation of the D eterm inants of School Progress

and Academ ic A chievem ent in V ie tn a m ..............................................467

Paul Gleurwe

Part IV. Other Topics......................................................................... 503

14. Child Labor in Transition in V ietnam .......................................................... 505

Eric Edmonds and C arrie Turk

15. Econom ic M obility in V ietnam ...................................................................... 551

Paul Glewiue and Phong N guyen

16. Private Interhousehold Transfers in V ie tn a m .........................................567

Donald Cox

List of Figures, M aps, and Tables ............................................................................. 605

vi Contents

Index 615

Foreword

Vietnam 's econom ic and social achievem ents in the 1990s are nothing short

of am azing, arguably placing it am ong the top tw o or three perform ers

am ong all developing countries. This success dem ands serious study in

order to draw lessons for other developing countries. Fortunately, there are

high-quality data available to undertake such a study, and this book has

m ade full use of those data, especially the 1992-93 and 1997-98 V ietnam

Living Standards Surveys, to docum ent and understand V ietnam 's experi￾ence and to provide policy recom m endations for other low -incom e countries.

T his volum e offers a very broad array of studies of V ietnam 's econom y

and society in the 1990s. It begins w ith four chapters on V ietnam 's eco￾nom ic perform ance, each focusing on a different topic: m acroeconom ic

grow th, w age labor m arkets, household enterprises, and agriculture. O f

course, econom ic grow th can take m any form s, w ith w idely differing con￾sequences for poverty reduction. The next three chapters focus on poverty

reduction in the 1990s, exam ining the im pact (or lack thereof) of various

poverty program s, the spatial distribution of poverty, and poverty am ong

ethnic m inorities. The next five chapters exam ine health and ed ucation out￾com es. Three chapters on health consider child survival, child nutrition, and

use of health care services, and tw o chapters on education cover basic

trends in enrollm ent and financing and the factors that determ ine school

progress and academ ic achievem ent. T he last three chapters exam ine topics

of particular interest in Vietnam : child labor, econom ic mobility, and inter￾household transfers. As a w hole, this book constitutes a com prehensive

study of econom ic and social developm ent in Vietnam in the 1990s.

The research presented in this book involves the collaboration of n um er￾ous individuals and organizations. The tw o Vietnam Living Standards

Su rveys used in the book w ere im plem ented by V ietn am 's G eneral

Statistical O ffice, w ith financing from the U nited N ations D evelopm ent

vii

viii Forezivrd

Program m e and the Sw edish International D evelopm ent A gencv and tech￾nical support from the World Bank. Funding for the research w as obtained

from the World Bank's Research C om m ittee. The results w ere first presented

at a w orkshop in Hanoi in M ay 2001 that w as attended by a w ide range

of gov ern m en t officials, in ternation al org an ization s, and ind ividu al

researchers.

The extensive use m ade o f household survey data in this study raises the

question of w hat data w ill be collected in the future in Vietnam . Fortunately,

V ietnam 's G eneral Statistical O ffice has developed, w ith assistance from the

United N ations D evelopm ent Program m e and the W orld Bank, a plan for

im plem enting sim ilar household surveys every tw o years. The first survey,

know n as the Vietnam H ousehold Living Standards Survey, w as im ple￾m ented in 2002 and preparations are now under w ay to im plem ent another

survey in 2004. This continued data collection w ill provide a sound fou n ­

dation for study of Vietnam 's social and econom ic progress in the first

decade of the 21st century.

François J. Bou rgu ign on

C h ief Econom ist and Senior V ice P resid ent

T he W orld Bank

Acknowledgments

M any people in addition to the authors contributed to this book, and w e

appreciate their assistance. Funding for the tw o Vietnam Living Standards

Surveys w as provided by the U nited N ations D evelopm ent Program m e and

the Sw ed ish In tern ation al D evelop m en t A gency. The Social and

Environm ental Statistics D epartm ent of Vietnam 's G eneral Statistical O ffice

im plem ented both surveys w ith a very high degree of enthusiasm and pro￾fessionalism . Indeed, several of the authors of these chapters are from that

departm ent. Sarah Bales served as an outstanding consultant in the im ple￾m entation of the second survey. Financial support to undertake m uch of the

research w as obtained from the W orld Bank's Research Com m ittee. The

British D epartm ent for International D evelopm ent funded a w orkshop to

dissem inate first drafts of the papers, w hich w as held in H anoi in M ay 2001,

and also funded several of the papers. Very able editing and m anuscript

processing w ere provided by A lison Peña, Em ily Khine, and Lucie Albert￾Drucker. The W orld Bank's O ffice of the Publisher m anaged editorial and

print production, including book design. N um erous other people con￾tributed in m any w ays, but if w e attem pt to nam e them all, w e are likely to

om it several of them.

Finally, w e w ould like to thank all the households that participated in

both surveys; by providing a large am ount o f inform ation, they h ave helped

us understand w hat has occurred in Vietnam in the 1990s. H opefully, our

research w ill lead to better policies that w ill im prove their lives in the years

to com e.

ix

Contributors

Bob Baulch

D w ayne Benjam in

Loren Brandt

Truong Thi Kim Chuyen

D onald Cox

David D ollar

Eric Edm onds

John Luke Gallup

Paul G lew w e

Fellow , In stitu te of D evelop m ent Stu d ies,

U niversity o f Sussex, Brighton, United Kingdom

Departm ent of Econom ics, U niversity o f Toronto,

Ontario, Canada

D epartm ent o f Econom ics, U niversity o f Toronto,

Ontario, Canada

D epartm ent of G eography, N ational U niversity

of Ho C hi M inh City, Vietnam

D ep artm en t of Econ om ics, B oston C ollege,

C hestnut H ill, M ass.

D evelop m ent R esearch G roup, W orld Bank,

W ashington, D.C.

D epartm ent of Econom ics, D artm outh College,

H anover, N.H.

C onsultant to the W orld Bank

D epartm ent of A pplied Econom ics, U niversity

of M innesota, St. Paul; and senior econom ist for

the W orld Bank

xi

D om inique H aughton

Jonathan Haughton

Stefanie Koch

N icholas M inot

Bui Linh N guyen

Nga N guyet N guyen

Phong N guyen

Pravin K. Trivedi

Carrie Turk

D om inique van de Walle

W im P. M. Vijverberg

Adam W agstaff

xii

D epartm ent of M athem atical Sciences, Bentley

College, W altham , M ass.

D epartm ent of Econom ics, Suffolk University,

Boston, M ass.

Consultant to the W orld Bank

R esearch Fellow , In tern ation al Food P olicy

Research Institute, W ashington, D.C.

General Statistical O ffice, H anoi, Vietnam

Poverty Reduction and Econom ic M anagem ent,

W orld Bank, Vietnam C ountry O ffice, H anoi

G eneral Statistical O ffice, H anoi, V ietnam

D epartm ent of Econom ics, Indiana U niversity,

Bloom ington

Poverty R eduction and Econom ic M an agem en t,

World Bank, Vietnam C ountry O ffice, H anoi

D evelop m ent R esearch G rou p , W orld Bank,

W ashington, D.C.

School of Social Sciences, U n iversity of Texas at

Dallas

H ealth, N utrition, and Pop ulation Team , W orld

Bank, W ashington, D.C.

Contributors

Abbreviations and Acronyms

2SLS Tw o-stage least squares

2SLSFE Tw o-stage least squares w ith fixed effects

ANOVA Analysis of variance

ASEAN A ssociation of Southeast A sian N ations

BMI Body m ass index

CEM M A Com m ittee for Ethnic M inorities in M ountainous A reas

CHC C om m une health center

CPI Consum er price index

CPRGS Com prehensive Poverty Reduction and Grow th Strategy

CSI Com prehensive Student Insurance

D Vietnam ese dong (currency)

DHS D em ographic and H ealth Survey

FDI Foreign direct investm ent

FEs Fixed effects

GD P Gross dom estic product

GER Gross enrollm ent rate

GNI Gross national incom e

GN P Gross national product

GSO G eneral Statistical O ffice

HEPR H unger Eradication and Poverty R eduction

ICDS Inter-Censual D em ographic Survey

ICRG International C ountry Risk G uide

ILO International Labour O rganisation

IMR Infant m ortality rate

IUD Intrauterine device

IV Instrum ental variable

M A RS M ultiple adaptive regression spline

MCI M ultiple cropping index

X lll