Rural Income Growth and Convergence in Vietnam

Abstract

We investigated the growth and convergence in Vietnamese rural income using the household survey data, VHLSS of the years, 2004 and 2018. The regional convergences in the district level income sources were estimated and tested. We found that real agricultural income, off-farm income, and the whole farm income all increased and converged, but the convergence rate in off-farm income was much higher than that in agricultural income. The convergence in income implies that an overall increase in rural income in Vietnam will contribute to reducing poverty rate. We also found that the geographic characteristics are the main determinants of agricultural income growth rates. On the other hand, ethnic minorities and people living in poverty have difficulties in developing off-farm income sources despite the convergence tendency of off-farm income.