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Poverty Dynamics During Trade Reform: Evidence From Rural Vietnam

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  • Patricia Justino
  • Julie Litchfield
  • Hung Thai Pham

Abstract

This paper implements and adapts the conceptual framework developed by Winters (2002) that identifies the transmission mechanisms between trade policy reform and household welfare outcomes. We make use of household panel data from Vietnam collected in two years, 1992–93 and 1997–98 that span the very earliest years of the reform period and its immediate after effects. Poverty dynamics are modeled using changes in consumption expenditure and poverty transition models. The trade effect is captured by a set of variables that are most likely to have an impact on rural poverty, namely prices of staples and employment in the export sector. We show that trade liberalization has a material and positive effect on rural household welfare and this trade effect is largely transmitted to the poor through the labor market channel.

Suggested Citation

  • Patricia Justino & Julie Litchfield & Hung Thai Pham, 2008. "Poverty Dynamics During Trade Reform: Evidence From Rural Vietnam," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(2), pages 166-192, June.
    • Handle: RePEc:bla:revinw:v:54:y:2008:i:2:p:166-192
    DOI: 10.1111/j.1475-4991.2008.00269.x
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    Cited by:

    1. Obed I. Ojonta & Divine N. Obodoechi & Paschaline N. Ugwu, 2021. "Start-up Capital Source and Credit Access Participation of Household Nonfarm Enterprises in Nigeria: Evidence from Logistic Regression Model," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 19(3 (Fall)), pages 249-267.
    2. Quintero Peralta, María Angélica & Gallardo Cobos, Rosa María & Ceña Delgado, Felisa, 2017. "Implicaciones de la disminución de la capacidad productiva de granos básicos sobre la alimentación en comunidades rurales pobres de México," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 16(02), January.
    3. Pamela Coke Hamilton & Yvonne Tsikata & Emmanuel Pinto Moreira, 2009. "Accelerating Trade and Integration in the Caribbean : Policy Options for Sustained Growth, Job Creation, and Poverty Reduction," World Bank Publications - Books, The World Bank Group, number 2652.
    4. Barbara Coello & Madior Fall & Akiko Suwa-Eisenmann, 2010. "Trade Liberalization And Poverty Dynamics in Vietnam 2002-2006," Working Papers halshs-00966364, HAL.
    5. Adepoju, A., 2018. "determinants of multidimensional poverty transitions among rural households in Nigeria," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276027, International Association of Agricultural Economists.
    6. Godstime Osekhebhen Eigbiremolen & Jonathan Emenike Ogbuabor, 2018. "Measurement and Determinants of Food Poverty: A Dynamic Analysis of Nigeria's First Panel Survey Data," African Development Review, African Development Bank, vol. 30(4), pages 423-433, December.
    7. Garza-Rodriguez, Jorge & Fernández-Ramos, Jennifer & Garcia-Guerra, Ana K. & Morales-Ramirez, Gabriela, 2015. "The dynamics of poverty in Mexico: A multinomial logistic regression analysis," MPRA Paper 77743, University Library of Munich, Germany.
    8. Andy McKay & Saurabh Singhal & Finn Tarp, 2018. "Welfare dynamics in rural Vietnam: Learning from regular, high-quality panel data," WIDER Working Paper Series wp-2018-169, World Institute for Development Economic Research (UNU-WIDER).
    9. Emiliano Magrini & Pierluigi Montalbano, 2012. "Trade openness and vulnerability to poverty: Vietnam in the long-run (1992-2008)," Working Paper Series 3512, Department of Economics, University of Sussex Business School.
    10. Aviad Tur-Sinai & Noah Lewin-Epstein, 2020. "Transitions in Giving and Receiving Intergenerational Financial Support in Middle and Old Age," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(3), pages 765-791, August.
    11. Fred Mawunyo Dzanku, 2020. "Poverty Reduction And Economic Livelihood Mobility In Rural Sub‐Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(5), pages 636-683, July.
    12. Buffie, Edward F. & Atolia, Manoj, 2012. "Trade, growth, and poverty in Zambia: Insights from a dynamic GE model," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 211-229.
    13. Bruno Arpino & Arnstein Aassve, 2014. "The role of villages in households’ poverty exit: evidence from a multilevel model for rural Vietnam," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(4), pages 2175-2189, July.
    14. Anh Thu Quang Pham & Pundarik Mukhopadhaya, 2022. "Multidimensionl Poverty and The Role of Social Capital in Poverty Alleviation Among Ethnic Groups in Rural Vietnam: A Multilevel Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 159(1), pages 281-317, January.
    15. Thang T. Vo & Dinh X. Nguyen, 2021. "Impact of Trade Liberalization on Household Welfare: An Analysis Using Household Exposure-to-Trade Indices," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(2), pages 503-531, January.
    16. Le, Minh Son, 2014. "Trade openness and household welfare within a country: A microeconomic analysis of Vietnamese households," Journal of Asian Economics, Elsevier, vol. 33(C), pages 56-70.
    17. Anh Thu Quang Pham & Pundarik Mukhopadhaya & Ha Vu, 2021. "Estimating poverty and vulnerability to monetary and non-monetary poverty: the case of Vietnam," Empirical Economics, Springer, vol. 61(6), pages 3125-3177, December.
    18. Andy McKay & Saurabh Singhal & Finn Tarp, 2018. "Welfare dynamics in rural Vietnam: Learning from regular, high-quality panel data," WIDER Working Paper Series 169, World Institute for Development Economic Research (UNU-WIDER).
    19. Pham, Hung T, 2006. "Rural Nonfarm Employment Under Trade Reform Evidence From Vietnam, 1993-2002," MPRA Paper 6476, University Library of Munich, Germany.
    20. Hoang, Viet-Ngu & Vu, Duc-Cuong, 2021. "On the effects of trade on multidimensional deprivation: Evidence from Vietnam’s rice growing households," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 476-485.
    21. Trung Xuan Hoang & Quang Nhat Bui, 2017. "Sectoral Employment and Poverty in Rural Vietnam in 2000s," Economics Bulletin, AccessEcon, vol. 37(4), pages 2458-2465.
    22. Rongen,Gerton & Binti Ali Ahmad,Zainab & Lanjouw,Peter F. & Simler,Kenneth, 2022. "The Interplay of Regional and Ethnic Inequalities in Malaysian Poverty Dynamics," Policy Research Working Paper Series 9898, The World Bank.
    23. Edith C. Obiefuna & Obed I. Ojonta & Jonathan E. Ogbuabor, 2023. "Impact of Employment on Access to Credit of Non-Agricultural Household Enterprises in Nigeria," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 13(3), pages 96-112.
    24. Vo, Thang T., 2018. "Household vulnerability as expected poverty in Vietnam," World Development Perspectives, Elsevier, vol. 10, pages 1-14.

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