Does Urbanization Help Poverty Reduction in Rural Areas? Evidence from Vietnam

Mohamed El Hedi Arouri (1) , Adel Ben Youssef (2) , Cuong Nguyen-Viet (3)

1 LEO - Laboratoire d'économie d'Orleans [2008-2011]
2 GREDEG - Groupe de Recherche en Droit, Economie et Gestion
3 Chercheur indépendant

Urbanization and poverty have a two-way relationship. Using fixed-effects regression andpanel data from household surveys, we estimate the effect of urbanization on welfare andpoverty of rural households in Vietnam. We find that urbanization tends to increaselandlessness of rural households and to reduce their farm income. However, urbanizationhelps rural households increase their wages and non-farm incomes. As a result, totalincome and consumption expenditure of rural households tend to be increased withurbanization. Then we find that urbanization also helps rural households decrease theexpenditure poverty rate, albeit at a small magnitude.

Mots clés: urbanization; household welfare; rural poverty; impact evaluation; household surveys; Vietnam; Asia

Domaines: Economies et finances

Mohamed El Hedi Arouri, Adel Ben Youssef, Cuong Nguyen-Viet. Does Urbanization Help Poverty Reduction in Rural Areas? Evidence from Vietnam. 2014. ⟨halshs-01068266⟩