Income Diversity and Poverty Transitions : Evidence from Vietnam
from these activities increased by closed to 10 percent . Nonagricultural activities were usually off-farm employment , selfemployment , interest from lending , remittance , and public transfer , etc . On average , a nonagricultural activity yielded closed to VND 18 million by 2007 . Over the three years , there was only a little increase of 0.1 activities , but income from this activity rose by 22 percent ( see Table 1 ). These imply that the transition to nonagricultural activities affects positively on a household ’ s income ; yet , the transition was relatively slow .
The pattern of income diversity differed from one population subgroup to another . Households in DL had less agricultural activities than their counterparts in HT and TTH , but agricultural activities in the former were of higher value . On average , a household in DL had only less than four agricultural activities and earned closed to VND 17 million from coffee , pepper , and cashew crops , while a household in TTH and HT had more than six agricultural activities by 2007 and earned only approximately VND 5 million . Nonagricultural sectors were not developed in HT , making households there rely more on crops and livestock to generate income .
Among 54 ethnic groups in Vietnam , the Kinh is the majority that accounts for nearly 86 percent of the entire population . They usually live in lowlands , which allows them to have better access to markets and public services , ergo they benefit more from economic growth . On average , a Kinh household had less agricultural income sources and earned more from these than a household of ethnic minority groups did ; the earlier also made a faster increase in the income . A Kinh household was also more likely to diverse its income sources to nonagricultural activities .
Generally , the results show that households with better human capital usually have better access to markets . They are , therefore , not only able to have more profitable crops and livestocks but also more able to shift their income portfolio to nonagriculture sources . In addition , households in TTH and DL have more opportunities to switch to nonfarming income sources owing to the better performance of the economy in the two provinces as compared with HT . Moreover , DL households particularly have advantages in growing high-value crops , such as coffee , pepper , and cashew , because of the weather and soil condition .
Trends in Poverty and Inequality
The overall poverty headcount ratio in Vietnam ( as measured by per capita expenditure ) continued to decrease from closed to 16 percent in 2006 to 14.5 percent in 2008 ( GSO 2011 ). The poverty headcount ratios in the three provinces ( as measured by equivalence scaled income ) were lower than the ratios ( as measured by per capita expenditure ) found by Le , Nguyen , and Singh ( LNS ) ( 2014 ) ( see Table 2 ). The three provinces not only made good progress in poverty reduction , but were also successful in keeping the equity of the development as well . The gap between the first and the fifth income quintiles increased slightly from 4.8 to 4.8 and 5.2 over the years , respectively , and the Gini index also increased only marginally from 0.301 to 0.301 and 0.315 over the period .
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