Dynamics of Poverty and the Development Gap
Between Ethnic Majority and Minority in Vietnam

Nguyen Tuan Anh

BULLETIN OF SOCIAL SCIENCES AND HUMANITIESGraduate School
TOKYO INTERNATIONAL UNIVERSITY
No. 5 offprint September 20, 2020

Dynamics of Poverty and the Development Gap
Between Ethnic Majority and Minority in Vietnam
Nguyen Tuan Anh

Abstract
Vietnam, despite enjoying rapid economic growth for nearly three decades, exhibits evidence
of increasing disparities across sections. The increasing concerns on whether the wealth is equallydistributed among its diverse ethnic groups are examined in this study. By classifying “minority” into
four finer categories, we found that two groups who are most closely assimilated with the majority,“Tay-Thai-Muong-Nung” and “Khmer-Cham”, experienced moderate development, while the othertwo, “Highland” and “Northern Upland” minority, stagnated. The development gap, measured bylog expenditure per capita, between ethnic majority and minority in Vietnam from 2004 to 2016 isfurther evaluated and decomposed by two approaches, Oaxaca-Blinder and Machado-Mata. During
this period, the mean expenditure gap between the majority (Kinh – Hoa) and their counterpart
significantly diverged by nearly 30%, despite other welfare outputs were converging. Expanding
the analysis to the whole distribution, ethnic inequality was narrowed down among the richest,
but greatly increased among the poor. The returns on characteristics become more important in
explaining the gap at the bottom tails, while characteristics differences remain to be dominant reason
in explaining the rich’s welfare gap. This reversal in welfare disparities components raises importantquestions for policymakers concerning evolvement of disadvantages faced by minority, and the needs
for new approaches from government to assist ethnic minority’s poor.

achieved the UN’s Millennium Development

I. Introduction

Goal of Eradicate Extreme Poverty and Hunger
by 1998. However, it raised the concern of “toIt has been 30 years since the economic

which extent the poverty alleviation process

reform “Doi Moi” initiated; Vietnam’s threegoes”. World Bank (2014) reported that the

decades of continuing economic growth had

nation exhibits evidence of increasing disparities

benefited its citizens’ wealth significantly. The

across sections. One of the major concerns

outcome of the reform was translated into

is whether the wealth is equally distributed

an unprecedented poverty reduction. The

among the country’s diverse ethnic groups.

poverty headcount in Vietnam fell from nearly

Development gap between majority and minority

60 percent in early 1990s to 37.4 percent in

is a well-known issue around the world, where

1998 and to 20.7 percent in 2010 (World Bank,

the problem is observed in both developing

2004; Badiani et al., 2013). Vietnam also had

countries – India, Laos, Mexico, and China –̶ 12 ̶人文・社会科学研究

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and developed countries – Australia, and Unitedand minority’s poverty in Vietnam in a detailed

States. One might speculate that multiethnicmanner, paying attention to the revolution in

Vietnam, with its successful pro-poor economic

ethnic’s disparity among poorest groups. Up until

growth and quick poverty reduction (Glewwe &now, to our knowledge, most of the literature

Dang, 2011; Nguyen & Pham, 2018), will be an

analyze and compare results attain from Oaxaca-

exceptional case in which inequality between

Blinder decomposition which is based on OLS

ethnic majority and minority is minor.

regression. Due to the nature of OLS regression,

However, past studies show the contrary.

the analysis limits at evaluating the welfare gap

Despite comprising just over one-eighth ofand its distributional factors at mean values;

population, the minority accounted for 40

thus, it is not sufficient to draw conclusions on

percent of the poor in 2004 (World Bank,

which and how important factors contribute2004). By 2012, minority group had constituted

to the consistent welfare gap between groups,

more than half of the nation’s poor (Badiani etespecially among those who locate at two ends

al., 2013), and poverty among minorities got

of income distribution. The characteristics of theworse off overtime. In addition, the relative

poorest and the richest should not be similar,

poverty reduction rate of the minority is muchand the returns on their characteristics mustslower than that of the majority. From 1993

also be drastically diverse. Therefore, rather

to 2006, the poverty headcount, that is, thethan looking at a representative mean value, thepercentage of population whose per capita

understanding of the wealth differences would

expenditure are below the General Statistic

be more fruitful if the distribution is instead put

Office - World Bank poverty line (GSO – WB),

into analysis. For this reason, in addition to OLS-

fell 81% for the majority (from 54% to 10%),based Oaxaca-Blinder decomposition, Machado-

while it is only 39% reduction for the minority

Mata decomposition approach which is based(from 86% to 52%) (Baulch, 2007). Poverty, lifeon quantile regression is utilized in this study.

expectancy, nutrition status and other living

Quantile-regression-based-model is a particularly

standard measures remain stagnantly low among

useful tool when analyzing the changes in theminorities compare with that of Kinh and Hoa

distribution is the main interest, because it(Chinese) group in spite of numerous supportive

allows researchers to evaluate the values atpolicies were introduced to lift up those groups’

different points on the distribution. In addition, by

quality of life (Swinkels and Turk, 2006; World

the quantile regression virtue, the results are lessBank, 2009).

sensitive when the conditions of linear regression

The issue of poverty in Vietnam indeed

are not met (i.e. heteroskedasticity, normality)–cannot be fully addressed without compre-

the situation which usually encountered whenhensively analyzing the revolution of ethnic’s

dealing with micro-data.

poverty and their income growth in the last

The rest of the paper starts by reviewing

two decades, especially after the significant

current literature regarding ethnic inequalities.

adjustment of the economy after Vietnam’s

After that, Section III discusses our empiricalaccession into WTO in 2007. In this study, we

strategies in finer details. Section IV, first,

seek to contribute to the current literaturepresents results of investigating various welfare

regarding poverty and inequality by examining

outcomes including income, expenditure,

the dynamical movement of ethnic inequality

education, and labor market participation

Dynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

to assess overall ethnics disparity and its

̶ 13 ̶

ready to access and analyze.

developments over time. This is followed by a

One of the earliest quantitative papers that

more detailed decomposition of the disparities,

examine the ethnic gap in living standard is

employing Machado-Mata approach on data

Haughton and Haughton (1997). Authors employedfrom Vietnamese Living Standards Survey from

Vietnam Living Standard Survey(VLSS) dataset

2004 to 2016. Finally, we conclude this paper

to highlight the significantly high possibility ofin part V by summarizing our findings andminority children to be stunted. They showed

discussing policy implication. By taking Vietnam

the height-for-age Z-score of minority groups is

as a case study, this paper aims to examine the0.2 point lower than its counterpart. Despite thedeterminants of the development gap, and help

significant result, this paper does not control for

to identify challenges for policymakers undergeographical effects, hence the result might pickthe new realm of globalization.

up the noise caused by the fact that the minority
mostly reside in remote and mountainous areas.

II. Literature Review

The most significant studies which set
foundation on investigating Vietnam’s ethnic

In Vietnam, available documents onpoverty gap are van de Walle and Gunewardena

the poverty reduction process within ethnic(2001) and extension research by Baulch et al.

minorities conducted by Ministry of Labor, War(2007) that examine the relative contribution

Invalids, & Social Welfare are not sufficient andof characteristics, the return to characteristics

not up to date. On the other hand, reports fromand geography to minority’s income. Both of two

international agencies such as the World Bank

papers use subsample of rural households inor the Asian Development Bank are useful towhat they loosely define as “northern Vietnam”

understand the broad picture, however, are not(van de Walle and Gunewardena, 2001). This

representative for the whole nation because theysubsample consists of Northern Region andwere mostly focused in three provinces where

Central Highland Region ethnic minorities.

the poverty rates of ethnic groups are highest

Using this sample, they regress the logarithmic(World Bank, 2009).

expenditure per capita on a number of covariates

Not to mention, although there are detailed

which could be categorized into household

qualitative, anthropologically-focused studies

demographic characteristics (household headon ethnic groups, researches regarding theages, number of dependents, male/female

development gap between ethnic majority andratio), educational level, and types of landminority in Vietnam are very few. The limitation

areas cultivated by household. After achieving

perhaps is due to the availability and reliability

the estimations of returns on characteristics,

of Vietnam’s microdata, along with the nation’s

they carried out Oaxaca-Blinder decomposition

relatively smaller economy size and similarities(Blinder, 1973; Oaxaca, 1973) to explain thein economic model with its neighbor, China,difference in mean expenditure between two

where many research interests are concentrated.

groups. Their results suggest that the return

Fortunately, under the practice of Vietnameseon characteristics (or discrimination effect as

General Statistical Office in association with thedefined by Oaxaca-Blinder) has sizable effect

World Bank, the Living Standard Surveys areto the difference in living standard between

carried out biannually. The data is hence more

ethnic majority and minority. It indicates that̶ 14 ̶人文・社会科学研究

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the minority group will gain a substantiallymost studies utilized the decomposition techniquesless amount of income even if the distribution

developed by Oaxaca-Blinder, which is basedof these characteristics is made equal to theon ordinary least squared regression analysis.

majority. In other words, policies that simply

Under analysis’ assumption, the gap can be

improve minority’s education, or provide more

further detailed into covariates’ contributions,land for production do not necessary reduce

which provide great insights in explaining thethe development gap. They also found that thecauses of disparity. However, as discussed indevelopment gap between two groups is getting

Section I, the analysis results are not sufficientlarger over years (Baulch et al., 2007). The

to draw conclusions on which and how

similar result is obtained in study of Litchfieldimportant factors contribute to the consistentand Justino (2004); they found that the ethnic

disparity between groups. Because our main

minority are poorer than its counterpart, andinterest lies on the development gap, the focus

the difference in poverty rate widened fromof the studies should concentrate on people

1993 to 1998. Nguyen et al. (2007) echoed thisat two ends of income distribution rather thanresult in their study even though their focus was

the representative mean or median. This paper

on disparity in income between urban and rural.

aims to fill this knowledge gap by developing an

They mentioned that there is penalty on income

applied model based on most recent informationof households who are minority, and it getsfrom household surveys across various regions

larger after two periods.

over time. It will help to assess the current

Baulch et al. (2010) contributed to thesituation of inequality between ethnic majority

literature using VLSS 1998 and 3 rounds of theand minority, and explain the chronic poverty

Vietnam Household Living Standard Survey

among the ethnic group.

(VHLSS) 2002, 2004, and 2006. Besides theIII. Methodology

descriptive statistic, they presented the OaxacaBlinder decomposition result for the years of
1998, 2004 and 2006. They also introduced an

1. Dataextension approach developed by Machado andThis paper employs 7 rounds of Vietnamese

Mata (2005). This decomposition technique

Living Standard Survey which follow the globally

employs quintile regression which allows

recognized World Bank’s Living Standard

authors to evaluate changes at different levels

Measurement Survey. The survey is carriedof expenditure distribution rather than evaluate

out biannually. It is national representative,the decomposition at the mean value likeand covers a wide range of topics including:

Oaxaca-Blinder. Regardless of method andhousehold’s demographics, health, nutrition,

study year, their result supports what have been

education, housing condition, employment,

found before: The large amount of difference

income, expenditure, ownership of durable

in expenditure is explained by the difference ingoods, savings and credits. There are two

returns of households’ characteristics.

versions of the survey: 36-page short version

Nevertheless, previous studies employedadministered around 45,000 households each

VLSS and VHLSS up to 2006. Therefore, it mightyear while 43-page long version covered

be outdated in current context, after theabout 9,000 households. Because the longer

accession of Vietnam to WTO in 2007. Besides,

survey provides more detailed information onDynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

̶ 15 ̶

household’s expenditure, long VHLSS from 2004

from 2004 to 2016, is further evaluated andto 2016 will be weighted and used for analysis.

decomposed. The two decomposition approaches
used in this paper are Oaxaca-Blinder (1973)

2. Empirical strategy

and Machado-Mata (2005). The Oaxaca-Blinder

At the first step before analyzing thedecomposition (Oaxaca, 1973; Blinder, 1973)

regression result, the descriptive statistics of

was introduced to explain the difference in wage

various welfare indicators are presented in orderof two groups of workers by decomposing theto compare ethnic majority and minority. In

gap into two components: a portion that arise

Vietnam documents, “Kinh” (or the “Viê.t”, or

because two comparison groups have different

mainstream Vietnamese) and “Hoa” (Chinese)endowment (years of schooling, experience,ethnic groups are referred as majority; while

age etc.) when both groups receive the samethe rest 52 other groups are minority. In order

treatment (explained component), and a portion

to overcome the phenomenon in which thethat arise because one group is more favorably

analytical results are trivialized by heterogeneity

treated than the other group given the sameamong minority and add depth to the analysis,

endowment (unexplained or discrimination

until now referred “minority” group is further

components). In this paper context, the empiricaldissolved into four finer groups based on theirmodel is postulated by regressing a vector ofsimilarities in livelihood rather than based on

socio-economic characteristics (including age of

their culture similarities or the language grouphousehold head, the share of female household

to which the ethnic groups belong. The 4 groups

member, dependency burden, maximum

are: “Tay-Thai-Muong-Nung”, “Khmer-Cham”,

education attainment, female population,

Northern Upland and Central Highland. “Tay-whether household head is female, etc.), Xij, on

Thai-Muong-Nung” are ethnic groups amonglog of per capita expenditure of i-th household in

the largest and relatively closely assimilated

the j-th ethnic group, lnEij (j = m or e designatewith the Kinh; they populate mainly in North

majority and minority respectively):

to North East lowland mountains. “KhmerCham” are historically rooted from Cambodia;

lnEij = α + Xij β j + ε ij

nowadays they are closely inhabited with Kinh

i = 1, 2, 3, …, N, j = m or epeople, mostly residing in Mekong delta whichis the largest rice production area in Vietnam.

After regressing for each group and obtaining the

Together with two mentioned groups, twoparameters, the Oaxaca-Blinder decomposition

composite categories for ethnic minority areis performed to get:those who traditionally reside in Northern
Upland (including Hmong, Dao etc.) and Central

lnEm – lnEe = βˆm(Xm – Xe) + Xe( βˆm – βˆe )Highland (Ede, Ba Na, Co Ho, etc.). The detailsof group member are provided in Appendix 1.

that separates the differences in per capita

In the second step, in order to gain deeper

expenditure into the part that is due to different

insights on inequality situation, and to find out

characteristics of the two ethnic groups (firstwhich factors influence the welfare differenceterm on the right), and another part that reflects

between majority and minority, the development

the structural difference between them (orgap, measured by log per capita expenditure

discrimination component). In the equation,̶ 16 ̶人文・社会科学研究

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The first and second terms on the right ofestimated value; subscript “m” denotes majority

the equation above are quantile homologous toand “e” denotes minority; “β” is the parameter–associated to the explanatory variables; X isconventional Oaxaca-Blinder decomposition.

average of explanatory variables.

from two hypothesized distributions, hence

The approach decomposes the differences

As the main interest of this study lies at thethe result will not be affected by the choice ofdifference of the whole population, especially at

reference group. Nevertheless, this approach,the lower tail of its expenditure distribution, in

unfortunately, does not provide a detailed

the next step, we employ the quantile-regression-

breakdown of each covariate’s contribution.

based-decomposition approach developed byHence, for robustness and adding insights to the

Machado-Mata (2005) to see if the difference

analysis, both approaches (Oaxaca-Blinder andpersists. The model generates a counterfactual

Machado-Mata) will be carried out.

distribution of hypothesized wage distribution of

IV. Result

majority, given the characteristics distribution(distribution of human resource, demography,
dwells and production characteristics) of

1. Descriptive statistics

minority. The process involves a draw ofWe present and compare different welfare

random, with-replacement 100 observations

outcomes – including income and expenditure,from each majority and majority subsample.

education, living and production conditions – byThen, the ranked observations will be

ethnic groups and years in Table 1, Table 2,comprised as percentiles of distribution, andTable 3 and Figure 1 to Figure 5. All money-

their characteristics will be retrieved. The

related-values are deflated to 2010 value.

process will be replicated 500 times to create
500 observations at each θ quintile. Finally,th

the empirical quantile regression model withbootstrapping variance will be defined as:

Table 1 presents the mean per capita income
by group from 2004 to 2016.
Table 2 describes average education
attainment of each ethnic groups from 2004 to
2016. The measurement value of this table is theQθ (lnEij | Xij) = X' ij β θ ij for θ ∈(0,1) denotes

school grade/level which this individual finished.

θth quantile of distribution of log expenditure,

Table 3 shows ethnic groups’ proportion

given vector X of covariates.

of households who reside in rural area over theperiod from 2004 to 2016.

The counterfactual distribution, denoted

Figure 1 illustrates the kernel density ofas f(lnEm | Xe), is thence used against the wage

expenditure per capita for each ethnic group

distribution of majority, denoted as f(lnE m

for the years 2004, 2010, and 2016. The GSO-

| X m), to decompose the total difference into

WB poverty line is included in the figure for thecharacteristics difference and coefficientease of observing the dynamical development ofdifference.

expenditure distribution between groups.
Figure 2, Figure 3 and Figure 4 illustrate

Δ θ {Qθ (lnEm) – Qθ (lnEe)}= Δ{f(lnEm | Xm) – f(lnEm | Xe)} +Δ{ f(lnEm | Xe) – f(lnEm)} + residual

the proportion of households who have accessto health insurance, national electrical network,and clean water.

Dynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

̶ 17 ̶

Table 1: Per capita income by group (unit: thousand VND).

Table 2: Educational attainment by group (unit: years of schooling).

Table 3: Proportion of household resides in Rural area (unit: percentage).

̶ 18 ̶人文・社会科学研究

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Figure 1: Kernel densities of expenditure per capita for 2004, 2010, and 2016.

Dynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

̶ 19 ̶

Figure 2: Proportion of people who have health insurance

Figure 3: Proportion of households who have their main source of lighting fromnational electrical network.

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Figure 4: Proportion of households who live in house that have access to clean water.

Figure 5: Percentage of labor employed in each sector.

Figure 5 presents the labor structure ofFirst, ethnic majority (Kinh–Hoa) perform

each ethnic group over the period from 2004 tomuch better than minority on most of welfare

2016.

measurement (except for insurance holding –We observe several interesting patterns.

Figure 2). Minority has lower income in absoluteDynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

̶ 21 ̶

terms, and lower growth rate in income andthe abrupt diversion occurred during this time.

expenditure than its counterpart (Table 1, Figure

This finding is broadly consistent with current1). They have lower educational attainment

literature, confirming the existence of widening(Table 2), tend to work in the agriculture sector

ethnic inequality in Vietnam.

(Figure 5), to reside in rural areas (Table 3), andThe decomposition estimate results withhave lower access to adequate living, production

majority as the reference group are presented

conditions (Figure 3 and Figure 4). Second,in the following columns. A large portion

among minorities, Northern and Highland are(about half in 2016) of ethnic gap attributes

the least well-off groups, coming after “Tay-by returns to characteristics. The increasing

Thai-Muong-Nung”, who are in turn poorer

importance of coefficients differences put

than the Khmer and Cham. Another key thing

encumbrance on conventional interpretation

to remember is that two groups who are mostof “discrimination factor”. It is problematic toclosely assimilated with the majority, “Tay-Thai-

conclude that the minority are getting more

Muong-Nung” and “Khmer-Cham”, experienced

and more discriminated against, especiallymoderate development. Therefore, these twounder recent circumstances in which laborgroups are showing signs of catching up with themobility and the job market are greatly relaxed. In

majority. On the other hand, other two ethnic

addition to unobserved factors such as quality ofminority groups, Highland and Northern Uplandinfrastructure, education, public service that areminority, stagnated during this period. The

absorbed, the component is better interpretedsluggishness of the last two groups explains theas means at which people use their endowments

widening gap between them and other ethnic

to gain their living, or “production knowledge”.

groups.

This argument, along with the significance of the
return on characteristics, expresses the role of

2. Main results

government in not only increasing the quality of

2.1 Oaxaca-Blinder decomposition:

infrastructure, public services in regions where

Table 4 reports the results from estimating

minority concentrate, but also harmonizing a

Oaxaca-Blinder decomposition. The firstsmooth information transition across ethnic

column shows the absolute distance of welfare

groups at specific localities.

difference. Although observed some fluctuation,

Oaxaca-Blinder decomposition is also usedthe disparity has widened over the last decade.

to more finely disaggregate the differences in

After the accession to WTO, the gap narrowed

characteristics to find which factors contributedown; this might be because of the change inthe most to the ethnic gap. The result achievedlabor structure and rural-urban labor mobility

from the decomposition could be used asof minorities looking for new opportunities.

guidance for government and organizations,This movement is reflected in household labor

under the limit budget, to direct aids tostructure and urban rural residency of eachfactors that efficiently reduce inequality. The

ethnic group in Table 3 and Figure 5. After 2010,

covariates are grouped into 4 broad groups

inequality again rapidly escalated; offsetting all

including: dwelling characteristic, human capital

the reduction in the expenditure gap in the last

characteristic, demography characteristic,

period. The raw disparity increased by nearlyand production characteristic. The estimates

30% from 0.499 (2010) to 0.645 (2016) due tosuggest that dwelling characteristic is the̶ 22 ̶人文・社会科学研究

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Table 4: Oaxaca-Blinder decomposition results over years.

driven factor of endowment differentials. That

minorities have access to modern employment

is to say, leveling up access of minorities toopportunities, they can quickly catch up with theinfrastructure, such as electricity, clean water,

majority. However, it requires the minority to bebetter educational facilities etc., is an effective

equipped with necessary skills to successfully

way to lift up minority’ living standards. The nexttransition to modern labor structure, especially

important factor is production characteristic. If

in the next ten years when the next wave ofDynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

̶ 23 ̶

minority’s youths enter the job market. It, again,

over the period. Before 2010, the inequality

signifies the role of government in projecting

increased as the percentile. In other words,

future programs targeting those groups.

the poor did not suffer welfare disparity asmuch as people at the top of the distribution.

2.2 Machado-Mata decomposition

However, from 2010, two years after the

As the interest of this study lays at theaccession of Vietnam to WTO, this structure

difference of the whole population, especially at thereversed. The differences tend to decrease as

lower tail of its expenditure distribution, in the next

we go up the distribution. Ethnic rich, who

step, this study utilizes the quantile regression-

quickly responded to the changes, were able

based Machado-Mata (2005) decomposition to see

to close up the gap between them and their

if the differences persist. Figure 6 illustrates

counterparts. Furthermore, the magnitude of

the results of this exercise for the period fromreduction increases along the distribution; for2004 to 2016. The numerical decomposition

instance, from 2004 to 2016, the gap decreases

results are also provided in Table 5. The analysis

by 0.002 log point at 65th percentile, while at 95th

administers some important evidence on thepercentile, the expenditure difference between

development gap and its dynamisms over years.

two groups reduced by 0.19 log point. On the

The results of the decomposition reveal

other hand, the poor, at the beginning of thean unpleasant truth, while the development

globalization process, were not affected by the

gap at the top of distribution narrowed down,changing circumstances; hence, the differencesindicating the catching up of the best-off groupin welfare of people at the bottom end

minority to their counterpart, the equality ofremained unchanged. However, as the benefits

the bottom distribution deteriorated. Overof openness spilled over to other parts of

the 14 years’ interval, characteristics (or the

distribution, the gap between the poorest greatly

endowment differences) remain to be the mainincreased. At the bottom 20th percentile, the raw

factor explaining the welfare disparities of theexpenditure differences have increased about

rich. On the contrary, among poor people, this

0.2 log point over the last decade. By observing

component became less important in explaining

the dynamism of the change in inequality, we

the ethnic gap, and got surpassed by coefficientscan reasonably draw a conclusion on who wasdifferences in 2014. This transformation

the group that left behind the growing process,in structure, with the most ever-changing

the minority poor. The contradict evolution at

circumstances in the economy, suggests

two ends of distribution explained the change

the government to alter their approaches in

in inequality structure over years. Despite theproviding assistance to ethnic poor.

upper income group has observed an inequality

Going into details, at first, all of the total gap

reduction, especially when it signals the catching

and the decomposition values are statisticallyup process starts spreading to the middle class,significant, except for characteristics differences

the noteworthy escalation in inequality amongat 50th to 60th percentile of the year 2008. The

people belonging to ethnic groups at the bottom

total gaps, expressed by light purple “Predictof distribution is more worrisome.

gap” in the figure, are found to be not constant

Secondly, the decomposition procedure

along the distribution. In addition, the structure

proposes some interesting results. The contributionof inequality observed some significant changesof characteristics differences accounts for a人文・社会科学研究
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Figure 6: Machado-Mata decomposition results over years. Own calculation base on VHLSS 2004-2016

̶ 24 ̶
2020 年 9 月

Table 5: Machado-Mata Decomposition

Dynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

̶ 25 ̶

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relatively stable portion in ethnic gap among

other by the basic characteristics, such as

the upper median group, especially for the

primary education, access to clean water,

top 20 th of the distribution, indicating an

national electricity grids etc. Hence, policies toexistence of fundamental disparities in capital

support this group must be different to policies

endowment between two groups. Except forto people at the upper part of distribution.

2006, the coefficients component is not an

If characteristics differences are the major

important factor to explain for ethnic better-

determinant of total disparities, one-targeting-all

off group’s disadvantages against the majority.

policies in order to narrow down the differences

This phenomenon might be due to this group’s

between to group – such as universal education

similarity in access to quality infrastructure,policy, contraceptive education policy, andeducation, and information with the majority. In

increase household access to electricity by

the light of the finding, the most efficient way tosubsidies on usage fee (Circular No. 190/2014

eliminate the inequality for this group would beof Ministry of Finance) – is an efficient way toincreasing their endowment, by improving their

reduce the inequality. The result in descriptive

education level, training schemes, or credits

statistics proved that this approach has

program.

successfully increased ethnic group living

On the contrary, people who are below

standards. However, new challenges arise as

the median, especially the group of our interest

Vietnam’s economic structure adjusted. The new– the bottom 20 th percentile – performed ademands and the convergences of characteristics

dynamic evolution. Before 2012, similar tolead to the change of contribution framework.

people at the top of distribution, differences

Business know-how, quality of education,in characteristics play a dominant role ininfrastructure became more important factors to

explaining their ethnic inequality. However,explain the gap, signifying a need for a change instarting from 2012, the importance of difference inapproach from the government to eliminate thecoefficients (or the return of the characteristics)

inequality of the poorest, from a one-targeting-expanded. The coefficient difference surpassed

all policies to more tailored policy targetingthe characteristics difference in 2014, anddifferent ethnic group in each region.

maintained to be the strongest factor explaining
the development gap of ethnic poor (accounts

V. Conclusion

for two thirds of the total gap in 2016). The
dynamics in this group’s contribution might beEthnic inequality was examined in this

explained by the nature of their disadvantages.

study. It found that the disparities between

Despite the similarities with the richest groupmajority and minority are increasing, especiallyin the structure of contributions before 2012,

among people at the bottom of the pyramid. The

the differences in characteristics must be

structure of inequality also exhibits adjustment

understood differently. While the rich – whounder the new realm of globalization, proposing

most likely lives in house with necessary

new challenges for the government in assisting

facilities, graduate from high school or higher

the poor. Along with the findings, some policy– being differed to their ethnic counterpart insuggestions have been discussed across themeans of production (capital, assets, production

study. The economic growth, up until now,

know-how), the poor being diverged fromplays a dominant role in poverty reduction. It

Dynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

̶ 27 ̶

generates funds, capitals for poverty alleviation

receivers to work, rather than solely rely upon

programs such as Programme 135, phase I, II

free aids.

and III. However, the one-targeting-all programs

In addition, as production sector in whichhave excluded some marginalized groups

citizens are employed is another importantfrom the fruits of development, and evidently

factor, encouraging labor mobility, especiallyfrom this study, are ethnic poor. Therefore,

from agriculture to non-agriculture, rural-urban,

the government, on one hand, should develop

is an effective approach to increase people

more tailored, trickle up programs, with smaller

welfare. In this regard, policies to support ascale targeting regions where the ethnic poorsmooth structure transition such as education

concentrated to include people who left behindquality enhancement, skills training, credits

and lift them to catch up with other groups.

program and social safety net for migration

Those programs need to be developed withshould be initiated.

understanding, and respect to ethnic culture,

On other hand, as the determinant ofcustom, production habits and target to theirpoverty and inequality has been consistently

specific needs. Not to mention, the nature of

explained by the dwell characteristics, thethe program should also change from “free”

government should maintain their budget on

aids to conditional aids, which means receiving

enhancing public service, easing the accesshouseholds / members have to take some certain

to electricity, water, communication, andresponsibility to society. The conditional aids,

expanding roads, bridges, and infrastructure

not only help to direct the funds to the rightsystems.

person in need, but also create incentives for
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Dynamics of Poverty and the Development Gap Between Ethnic Majority and Minority in Vietnam

Appendix 1: Division of minority into subgroup for analyzing.

̶ 29 ̶