IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v12y2019i3p146-d266000.html
   My bibliography  Save this article

The Impact of Urbanization on Income Inequality: A Study in Vietnam

Author

Listed:
  • Nguyen Minh Ha

    (Business and Economics Research Group, Ho Chi Minh City Open University, 97 Vo Van Tan Street, District 3, Ho Chi Minh City 700000, Vietnam)

  • Nguyen Dang Le

    (Department of Financial Informatics and Statistics, Ministry of Finance, Ho Chi Minh City 700000, Vietnam)

  • Pham Trung-Kien

    (Faculty of Economics, Binh Duong University, 504 Binh Duong Avenue, Binh Duong Province 590000, Vietnam)

Abstract

This paper explores the impact of urbanization on income inequality in Vietnam, using the regression estimation method with panel data including Driscoll and Kraay, and Pooled Mean Group. The research data cover 63 provinces in Vietnam from 2006 to 2016. The results show that in the long term, urbanization has an impact on reducing income inequality. In the short term, urbanization has a negligible impact on income inequality. The hypothesis of an inverted-U-shaped relationship between urbanization and income inequality is confirmed. The high school enrollment rate and the proportion of agriculture have an effect on reducing income inequality.

Suggested Citation

  • Nguyen Minh Ha & Nguyen Dang Le & Pham Trung-Kien, 2019. "The Impact of Urbanization on Income Inequality: A Study in Vietnam," JRFM, MDPI, vol. 12(3), pages 1-14, September.
    • Handle: RePEc:gam:jjrfmx:v:12:y:2019:i:3:p:146-:d:266000
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/12/3/146/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/12/3/146/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Perdamen Sagala & Takahiro Akita & Arief Yusuf, 2014. "Urbanization and expenditure inequality in Indonesia: testing the Kuznets hypothesis with provincial panel data," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 133-147, October.
    2. Joseph STIGLITZ, 2013. "The global crisis, social protection and jobs," International Labour Review, International Labour Organization, vol. 152, pages 93-106, January.
    3. Ha Minh Nguyen & Le Dang Nguyen, 2018. "The relationship between urbanization and economic growth," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(2), pages 316-339, February.
    4. James E. Rauch, 1993. "Economic Development, Urban Underemployment, and Income Inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 26(4), pages 901-918, November.
    5. Takahiro AKITA & Rizal Affandi LUKMAN & Yukino YAMADA, 1999. "Inequality In The Distribution Of Household Expenditures In Indonesia: A Theil Decomposition Analysis," The Developing Economies, Institute of Developing Economies, vol. 37(2), pages 197-221, June.
    6. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    7. Oyvat, Cem, 2016. "Agrarian Structures, Urbanization, and Inequality," World Development, Elsevier, vol. 83(C), pages 207-230.
    8. Hamid Beladi & Chi‐Chur Chao & Mong Shan Ee & Daniel Hollas, 2020. "Urban development, excessive entry of firms and wage inequality in developing countries," The World Economy, Wiley Blackwell, vol. 43(1), pages 212-238, January.
    9. David E. Bloom & David Canning & Günther Fink & Tarun Khanna & Patrick Salyer, 2007. "Urban Settlement: Data, Measures, and Trends," PGDA Working Papers 2907, Program on the Global Demography of Aging.
    10. Johansson, Anders C. & Wang, Xun, 2014. "Financial sector policies and income inequality," China Economic Review, Elsevier, vol. 31(C), pages 367-378.
    11. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    12. Brülhart, Marius & Sbergami, Federica, 2009. "Agglomeration and growth: Cross-country evidence," Journal of Urban Economics, Elsevier, vol. 65(1), pages 48-63, January.
    13. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    14. Dongjie Wu & Prasada Rao, 2017. "Urbanization and Income Inequality in China: An Empirical Investigation at Provincial Level," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(1), pages 189-214, March.
    15. Ravi Kanbur & Juzhong Zhuang, 2013. "Urbanization and Inequality in Asia," Asian Development Review, MIT Press, vol. 30(1), pages 131-147, March.
    16. Bourguignon, Francois & Morrisson, Christian, 1998. "Inequality and development: the role of dualism," Journal of Development Economics, Elsevier, vol. 57(2), pages 233-257.
    17. David E. Bloom & David Canning & Günther Fink & Tarun Khanna & Patrick Salyer, 2007. "Urban Settlement: Data, Measures, and Trends," PGDA Working Papers 2907, Program on the Global Demography of Aging.
    18. Luis Angeles, 2010. "An alternative test of Kuznets’ hypothesis," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 463-473, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Batara Surya & Syafri Syafri & Hernita Sahban & Harry Hardian Sakti, 2020. "Natural Resource Conservation Based on Community Economic Empowerment: Perspectives on Watershed Management and Slum Settlements in Makassar City, South Sulawesi, Indonesia," Land, MDPI, vol. 9(4), pages 1-31, March.
    2. Jun Zhao & Xiucheng Dong & Kangyin Dong, 2021. "Can agglomeration of producer services reduce urban–rural income inequality? The case of China," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 736-762, December.
    3. Sabyasachi Tripathi, 2021. "How does urbanization affect the human development index? A cross-country analysis," Asia-Pacific Journal of Regional Science, Springer, vol. 5(3), pages 1053-1080, October.
    4. Xiao Yan & Saidatulakmal Mohd, 2023. "Trends and Causes of Regional Income Inequality in China," Sustainability, MDPI, vol. 15(9), pages 1-18, May.
    5. Thanh NGUYEN, Phong & Le Hoang Thuy To NGUYEN, Quyen, 2020. "Critical Factors Affecting Construction Price Index: An Integrated Fuzzy Logic and Analytical Hierarchy Process," MPRA Paper 103437, University Library of Munich, Germany, revised 31 May 2020.
    6. Quoc Vu, Thong & Phu Pham, Cuong & Anh Nguyen, Thu & Thanh Nguyen, Phong & Thanh Phan, Phuong & Le Hoang Thuy To Nguyen, Quyen, 2020. "Factors Influencing Cost Overruns in Construction Projects of International Contractors in Vietnam," MPRA Paper 103435, University Library of Munich, Germany, revised 28 Jul 2020.
    7. Yanlei Gao & Yuan Tian & Guangwan Tan & Xiudong Wang, 2023. "Impact of Urbanization on Cropping Structure: Empirical Evidence from China," Agriculture, MDPI, vol. 13(6), pages 1-17, May.
    8. Chia-Lin Chang & Duc Hong Vo, 2020. "Contemporary Issues in Business and Economics in Vietnam and Other Asian Emerging Markets," JRFM, MDPI, vol. 13(6), pages 1-4, May.
    9. Toledo-Gallegos, Valeria M. & My, Nguyen H.D. & Tuan, Tran Huu & Börger, Tobias, 2022. "Valuing ecosystem services and disservices of blue/green infrastructure. Evidence from a choice experiment in Vietnam," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 114-128.
    10. Duc Nguyen Huu & Van Nguyen Ngoc, 2021. "Analysis Study of Current Transportation Status in Vietnam’s Urban Traffic and the Transition to Electric Two-Wheelers Mobility," Sustainability, MDPI, vol. 13(10), pages 1-27, May.
    11. Xiaohua Chen & Xinyi Zhang & Yuhua Song & Xueping Liang & Liangjun Wang & Yina Geng, 2020. "Fiscal Decentralization, Urban-Rural Income Gap, and Tourism," Sustainability, MDPI, vol. 12(24), pages 1-14, December.
    12. Nai Chiek Aik & Qiurui Zhang, 2023. "Use of Theil for a Specific Duality Economy: Assessing the Impact of Digital Inclusive Finance on Urban-Rural Income Gap in Chongqing," FinTech, MDPI, vol. 2(4), pages 1-12, September.
    13. Hao Tong, Kiet & Nguyen, Quyen Le Hoang Thuy To & Thi Mong Nguyen, Tuyen & Nguyen, Phong Thanh & Bich Vu, Ngoc, 2020. "Applying the Fuzzy Decision-Making Method for Program Evaluation and Management Policy of Vietnamese Higher Education," MPRA Paper 103448, University Library of Munich, Germany, revised 19 Jul 2020.
    14. Assem Abu Hatab & Padmaja Ravula & Swamikannu Nedumaran & Carl-Johan Lagerkvist, 2022. "Perceptions of the impacts of urban sprawl among urban and peri-urban dwellers of Hyderabad, India: a Latent class clustering analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 12787-12812, November.
    15. Sudeshna Ghosh & Buhari Doğan & Muhlis Can & Muhammad Ibrahim Shah & Nicholas Apergis, 2023. "Does economic structure matter for income inequality?," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(3), pages 2507-2527, June.
    16. Shruti Kanga & Suraj Kumar Singh & Gowhar Meraj & Anup Kumar & Ruby Parveen & Nikola Kranjčić & Bojan Đurin, 2022. "Assessment of the Impact of Urbanization on Geoenvironmental Settings Using Geospatial Techniques: A Study of Panchkula District, Haryana," Geographies, MDPI, vol. 2(1), pages 1-10, January.
    17. Xiejun Cheng & Min Zhang & Jiayi Xu & Jingrong Xu & Decai Tang, 2023. "Research on the Impact of Sustainable Urbanization on Urban Rural Income Disparity in China," Sustainability, MDPI, vol. 15(6), pages 1-12, March.
    18. Kolomak, Evgeniya, 2020. "Urbanization and income inequality: Cause or solution?," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 59, pages 55-70.
    19. Deepak Kumar Behera & Viswanathan Pozhamkandath Karthiayani, 2022. "Do globalization progress and sectoral growth shifts affect income inequality? An exploratory analysis from India," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(2), pages 352-375, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ruijia Wu & Rafael Alvarado & Priscila Méndez & Brayan Tillaguango, 2024. "Impact of Informational and Cultural Globalization, R&D, and Urbanization on Inequality," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1666-1702, March.
    2. Hamid Beladi & Chi‐Chur Chao & Mong Shan Ee & Daniel Hollas, 2020. "Urban development, excessive entry of firms and wage inequality in developing countries," The World Economy, Wiley Blackwell, vol. 43(1), pages 212-238, January.
    3. Maarek, Paul, 2012. "Labor share, informal sector and development," MPRA Paper 38756, University Library of Munich, Germany.
    4. Oyvat, Cem, 2016. "Agrarian Structures, Urbanization, and Inequality," World Development, Elsevier, vol. 83(C), pages 207-230.
    5. Xiaohua Chen & Xinyi Zhang & Yuhua Song & Xueping Liang & Liangjun Wang & Yina Geng, 2020. "Fiscal Decentralization, Urban-Rural Income Gap, and Tourism," Sustainability, MDPI, vol. 12(24), pages 1-14, December.
    6. Romano Piras, 2017. "A long-run analysis of push and pull factors of internal migration in Italy. Estimation of a gravity model with human capital using homogeneous and heterogeneous approaches," Papers in Regional Science, Wiley Blackwell, vol. 96(3), pages 571-602, August.
    7. Jonathan Temple, 2002. "Wage Inequality in a Dual Economy," Bristol Economics Discussion Papers 02/531, School of Economics, University of Bristol, UK.
    8. Sabyasachi Tripathi, 2021. "How does urbanization affect the human development index? A cross-country analysis," Asia-Pacific Journal of Regional Science, Springer, vol. 5(3), pages 1053-1080, October.
    9. Marc Helbling & Daniel Meierrieks, 2023. "Global warming and urbanization," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1187-1223, July.
    10. Takahiro Akita, 2017. "Educational Expansion and the Role of Education in Expenditure Inequality in Indonesia Since the 1997 Financial Crisis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(3), pages 1165-1186, February.
    11. Tan, Sui Chin & Ho, Chong Mun & Pang, Vincent, 2015. "Education inequality: become better or worse?," MPRA Paper 61627, University Library of Munich, Germany.
    12. Briones, Roehlano M., 2013. "Agriculture, Rural Employment, and Inclusive Growth," Discussion Papers DP 2013-39, Philippine Institute for Development Studies.
    13. Vincenzo Lombardo, 2012. "Modern foundations of dual economy models," Discussion Papers 8_2012, CRISEI, University of Naples "Parthenope", Italy.
    14. de Brauw, Alan & Mueller, Valerie & Lee, Hak Lim, 2014. "The Role of Rural–Urban Migration in the Structural Transformation of Sub-Saharan Africa," World Development, Elsevier, vol. 63(C), pages 33-42.
    15. Lewis S. Davis, 2004. "Explaining the Evidence on Inequality and Growth: Informality and Redistribution," DEGIT Conference Papers c009_032, DEGIT, Dynamics, Economic Growth, and International Trade.
    16. Sui Chin Tan & Chong Mun Ho & Vincent Pang, 2016. "Why Has Education Inequality Widened in Sabah, Malaysia?," Economics Bulletin, AccessEcon, vol. 36(1), pages 569-575.
    17. David Castells & Vicente Royuela, 2012. "Agglomeration, Inequality and Economic Growth: Cross-section and panel data analysis," ERSA conference papers ersa12p492, European Regional Science Association.
    18. Peppel-Srebrny, Jemima, 2021. "Not all government budget deficits are created equal: Evidence from advanced economies' sovereign bond markets," Journal of International Money and Finance, Elsevier, vol. 118(C).
    19. Haiwen Zhou, 2013. "The Choice of Technology and Rural-Urban Migration in Economic Development," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 8(3), pages 337-361, September.
    20. Ibrahim Mohamed Ali Ali & Imed Attiaoui & Rabeh Khalfaoui & Aviral Kumar Tiwari, 2022. "The Effect of Urbanization and Industrialization on Income Inequality: An Analysis Based on the Method of Moments Quantile Regression," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(1), pages 29-50, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jjrfmx:v:12:y:2019:i:3:p:146-:d:266000. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.