DOES GOVERNMENT SPENDING ON EDUCATION AFFECT PROVINCIAL INCOME INEQUALITY IN VIETNAM?

Chi Minh Ho, Quan Thai-Thuong Le, Anh The Vo, Duc Hong Vo and Dao Thi-Thieu Ha
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Chi Minh Ho: Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam
Quan Thai-Thuong Le: Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam
Anh The Vo: Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam
Duc Hong Vo: Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam
Dao Thi-Thieu Ha: ��Faculty of International Economics, Banking University Ho Chi Minh City, 56 Hoang Dieu 2 Street, Thu Duc District, Ho Chi Minh City, Vietnam

The Singapore Economic Review (SER), 2021, vol. 66, issue 04, 1105-1123

Abstract: This study is conducted to examine the effect on income inequality of government spending on education across 63 provinces in Vietnam. The generalized method of moments (GMM) regression technique is used to address potential endogeneity in the model caused by income inequality and inequality in government spending on education. Income inequality is proxied by both the Gini coefficient and the Theil index. Inequality in government spending on education in Vietnam is estimated using a novel entropic approach, which decomposes the inequality into two components: “within-province†inequality and “between-province†inequality. Data for the period from 2010 to 2016 are used. Our empirical findings are summarized as follows. First, “within-province†inequality accounts for a substantial portion of inequality in government spending on education. This means that although the Vietnamese national government has done well in terms of allocating spending on education across 63 provinces, inequality in education spending appears across districts within provinces. Second, both total inequality of government spending on education and its two components are positively associated with income inequality across provinces. As such, reducing differences in government spending on education across provinces and across districts within provinces is an effective mechanism for reducing income inequality across provinces and across districts within provinces in Vietnam.

Keywords: Education; entropic approach; government spending; inequality; Vietnam (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1142/S0217590820490065

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