The relationship between income inequality and economic growth of Vietnam

Ing. Huong Lien Ho

Doctoral thesis

Abstract:

Vietnam, a Southeast Asian country, is undergoing economic reforms aimed at liberalization, opening up, and integration into the region and the global economy. It has not only significantly contributed to the recent prosperity and economic growth of Vietnam but also has given rise to negative aspects, hindering the sustainable development of the economy, such as income inequality and the gap between the rich and the poor. The Northern Midlands and Mountains is one of Vietnam's six economic regions containing 14 provinces. However, this is still the country's poorest and most challenging core area. Therefore, the systematic study of the relationship between income inequality and economic development helps to provide scientific support for proposing views and policy implications for economic development and equitable implementation of income equality in the Northern Midland and Mountainous area in the coming period. From this point of view, the dissertation is conducted with the primary purpose is to evaluate the interrelationship between income inequality and economic growth in Vietnam's Northern Midlands and Mountains at both theoretical and practical levels. The author divides the thesis into three main parts. The first part evaluates the impact of economic growth, official development assistance, and unemployment on income inequality in Vietnam, considering the country's recent economic transformation, external financial resources, and the challenges posed by increasing unemployment rates from 1992 to 2022. The second part analyses the relationship between income inequality and economic growth in the Northern Midlands and Mountainous region. This part also identifies the interplay between fiscal policy factors and income disparity to tackle the research regions' income inequality. In the third part, the author analyses survey results from local people in the Northern Midlands and Mountainous region to identify which factors of income inequality and economic growth correlate. The dissertation combines quantitative and qualitative methods in analysing the relationship between income inequality and economic growth. The author builds quantitative models to test and estimate the relationship between income inequality and economic growth v in the Northern Midlands and Mountainous region through GDP, Gini coefficient, and explanatory variables. The author also develops a questionnaire to get opinions from experts and local managers on the research issue. After that, the author conducts an analysis to describe the characteristics of the collected data, codes the data, and uses the Crosstab analysis method to find correlations between the collected data. The dissertation's data is based on statistical yearbook data from the General Statistics Office's Vietnam Household Living Standards Survey (VHLSS) from 1992 to 2022. Some indicators are from the World Bank. In addition, primary data was collected from 319 survey samples. The research results show that in Vietnam, Official Development Assistance (ODA) initially positively impacted income inequality but then gradually decreased over time. Besides, there is a one-way causal relationship between the unemployment rate and GDP but not a significant relationship between the employment rate and income inequality. The research indicates that income inequality and expenditure inequality negatively impact economic growth in Vietnam's Northern Midlands and Mountainous region. The research finding indicates that specific fiscal policy measures, such as spending on health, income taxes, and pensions, contribute to increased household income inequality. Conversely, social security measures have a positive impact by reducing inequality in household income. According to the opinions of local people, specific factors of income inequality are correlated with economic growth in the Northern Midlands and Mountainous region. Some factors contribute more to economic growth in these correlations, bu

Abstract:

t others are more about income inequality.

Keywords

Northern Midlands and Mountains, economic growth, income inequality, ODA, fiscal policy, GINI, GDP, Vietnam, unemployment rate

Language used: English

Date on which the thesis was submitted / produced: 6. 9. 2024

Thesis defence

• Supervisor: doc. Ing. Irena Benešová, Ph.D.
• Reader: Vladimír Krepl, CSc., doc. Ing., Jaroslav Halík, externi, Eliška Vejchodská, externi

Czech University of Life Sciences Prague

Faculty of Economics and Management

Doctoral programme:
Podniková a odvětvová ekonomika