Decomposition of Inequality in Vietnam 2012

Tadashi Kikuchi  
(Faculty of Economics, Teikyo University, Tokyo, Japan)

Abstract: Income distribution in developing countries is changing dynamically due to changes in human activities on national development process. For political analysis, it is necessary to ascertain the main people’s socioeconomic activities influential on the change of income distribution. This paper implements the decomposition of inequality in Vietnam and calculates inequality indices to study which factors caused income distribution changes of Vietnam in 2012. Under the market-oriented “Doi moi” economic reforms since 1986, author shows that Vietnamese household income distribution dynamically changed in itself through human activities changes. Author also mentions that it resulted in the wide-gap between the rich and the poor. For fixing and decreasing this unbalance on the income distribution, author insists that studying influence of multiple households’ key characters, for instance, household’s residential area, household-head’s occupation and education level on income distribution helps Vietnam set back on the right path for its sustainable development with a long term perspective.

Key words: household data analysis; inequality; regional development

JEL codes: D