Income Distribution in Vietnam’ Regions

Abstract

Vietnam has seen rapid economic expansion in recent decades, yet income distribution remains uneven, with significant disparities among its populace. While some have experienced considerable income growth, others have not. The wealthiest 10% of earners account for nearly 40% of the nation's total income, while the bottom 40% earn just 15%. This inequality is especially pronounced in urban regions, where living costs are higher and job opportunities are scarcer for those with lower educational attainment. Although the Vietnamese government has implemented policies like increasing the minimum wage to address this issue, more action is necessary to ensure that all citizens benefit from economic progress. This study evaluates the influence of institutions on multidimensional poverty using household and provincial data from Vietnam. Employing the Multilevel Probit Model with data from the Vietnam Household Living Standard Survey (VHLSS) conducted in 2016, 2018, and 2020, the research indicates the following: (i) The impact of institutions on multidimensional poverty varies across localities; (ii) There is a negative correlation between institutions and multidimensional poverty reduction in urban areas and affluent provinces.