NONFARM ACTIVITY AND POVERTY REDUCTION IN RURAL VIETNAM: 2002-2008

Trung Hoang, Mehmet Ali Ulubasoglu () and Cong Pham
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Mehmet Ali Ulubasoglu: Deakin University, Australia

No 6, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: This paper uses the Vietnamese Households Living Standards Surveys of 2002, 2004, 2006 and 2008 to examine the effects of nonfarm activity on poverty in rural Vietnam. We show that nonfarm activity helps the poor, but not the poorest, given that households need to own a minimum level of endowment to partake in nonfarm activity. We find an inverted-U shaped relationship between households’ endowment levels and the probability of participating in nonfarm activity. Also, in contrast to previous studies which largely by-passed the endogeneity of nonfarm activity, we instrument it with nonfarm networks, and find that nonfarm activity plays an important role in poverty reduction, however, this impact decreases over time.

Keywords: instrumental variable; nonfarm; poverty; rural Vietnam (search for similar items in EconPapers)
Pages: 25 pages
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:dpc:wpaper:0612

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