Phân tích tính bao trùm trong tăng trưởng kinh tế ở việt nam giai đoạn 2004 2016 tt tiếng anh

1 INTRODUCTION Necessity of research: In the past few decades, the world has witnessed the increasing trend of inequality in many countries Even though there are many recorded achievements in terms of growth speed, poverty reduction, improved access to education, healthcare and Based on these facts, inclusive growth in income with both analysis of income growth and income distribution is the issue that needs deeper research Therefore, the thesis focused on the topic: "Analysis of inclusion in Vietnam economic growth during the period 2004-2016", with the desire to contribute more research on this topic with the context of Vietnam social security, few countries can neither ensure the benefits of growth are distributed in an equal way nor guarantee the equal participation of people in the growth process In many years, the correlated relationships among economic growth, poverty and the Research purposes 2.1 General objectives: increase in inequality has become the subject of concern and debate among researchers, scholars and policymakers around the world Analyze the inclusion of economic growth in Vietnam through several dimensions during the period 2004 – 2016 Significant economic growth is a crucial explanation for poverty reduction, but the reality shows that this growth does not necessarily improve the general living standards of Analyze the impact of several factors on income inclusiveness in Vietnam during the period 2004 – 2016 everyone If the benefits of growth only served the minority of people in the society, it Propose some solutions to improve the income inclusiveness in Vietnam would not be considered inclusive growth (Tirmazee and Haroon, 2015) Hausman and 2.2 Specific objectives: Gavin (1996) stated that developing countries had an unequal distribution of income and often recorded low inclusive growth This situation had been explained by many reasons The thesis aims to meet the following specific objectives: (i) systematizing the (Bigsten, 1983), and their governments always considered improving the inclusion of theoretical basis of inclusive growth and the impact of related factors on this growth, economic growth as one of the top priority goals in their development policies Felipe with the focus on inclusive growth of income, (ii) measuring and analyzing inclusion of (2012) and Afzal (2007) agreed with the view that inclusive growth was the growth income and some non-income aspects of Vietnam during period 2004-2016, (iii) achieved at the expense of reduced personal interests In other words, it promoted the assessing the effect of related factors on inclusion of income Vietnam from 2004 to distribution of benefit coordination among all members of the society In some developed 2016, and (iv) suggesting some policies for Vietnam based on empirical results countries, the inclusive growth goal has been achieved since the 1970s, but for developing Research Questions The thesis focuses on answering the following research questions: countries because high economic growth comes with great inequality, it is still the target of growth to be achieved (Todaro, 1994) Vietnam, like many other developing countries, has experienced substantial changes and fluctuations of the economy in recent years Issues such as poverty, human What is the situation of income growth and distribution in Vietnam during 2004 2016? How is the inclusion of income and some non-income aspects in Vietnam? development, and inequality are issues of great concern In particular, growth and income distribution have always been the hot topic of many studies, from the fact that many developing countries have achieved impressive results in poverty reduction but Which factors influence the inclusive growth of income in Vietnam? Which policies are necessary to improve inclusive situation of income in Vietnam? they could not solve the problem of reducing income inequality, meanwhile the trend of inequality has even become wider Among those aspects of the new growth perspective, the content of inclusive growth in income needs to be stressed, because of the fact that in many countries, income growth goes hand in hand with income inequality (Piketty, 2014) Many East Asian countries have reached miraculous achievements in growth and distribution, but suffered from decline in equitable income distribution (Zhuang, Kanbur and Lee, 2014; Jain-Chandra and et al., 2016) Research Subject and Research Scope Research subjects: Inclusive growth or the integrated concept between growth and distribution of dimensions in Vietnam’s economic growth - The estimation methods used in the thesis include: The study applied Panel data regression model based on fixed estimation and random estimation methods, and performed tests to select appropriate models In addition, to test whether spatial Research scope correlation exists among provinces and cities, Panel data regression model with spatial Scope of content: Among the aspects / indicators of inclusive growth, this study factors was also conducted besides necessary tests to choose which spatial model is the focused on evaluating the income aspect Scope of timing: In the period 2004-2016 Scope of space: most suitable Research structure Besides introduction, references and appendices parts, the structure of the thesis comprises of chapters, as follows: The analysis of inclusive growth situation in this study was carried out all over Vietnam, including urban, rural areas and ethinicity, and some aspects were done in Chapter 1: Theoretical framework of inclusive growth specific provinces and cities in Vietnam The panel data regression conducted in this Chapter 2: Research overview of inclusive growth research for quantitative analysis model was based on provinces and cities scope Chapter 3: The situation of inclusive growth in Vietnam during 2004-2016 Research methods The thesis used two main research methods: Descriptive statistics method: Used the secondary data set from the Vietnam Household Living Standards Survey (VHLSS), General Statistic Officer (GSO) and Chapter 4: Impact estimation of factors on inclusive growth in income in Vietnam during 2004-2016 Chapter 5: Policy recommendations other sources, the research measured the inclusive growth index of income and some other non-income aspects in Vietnam This index was calculated for the whole country, CHAPTER including urban - rural areas and ethnicity Only two indicators namely income and THEORETICAL FRAMEWORK OF INCLUSIVE GROWTH education level were calculated with the scope of provinces and cities in Vietnam during 2004-2016 The social opportunity function method of Ali and Son (2007) was applied 1.1 in this study with non-monetary indicators and was developed for income indicators 1.1.1 Some concepts of inclusive growth with the social mobility function by Anand et al (2013) (Specific information of the method would be presented in the main content of the thesis) Concepts and research content of inclusive growth Acemoglu, Robinson and Johnson (2004) are the first group of authors who introduced this growth concept They argued that the reason many countries have high Quantitative research method and sustainable growth was they had harmonious political and economic systems, in - The research made an estimate about impact of factors on inclusive growth of which the achievements and benefits from economic growth were fairly equitably income in Vietnam Data used in the study are from the Vietnam Household Living allocated among regions, economic sectors and social groups In contrast, in countries Standards Survey (VHLSS) from 2004 to 2016 and secondary data were collected from with no growth or less sustainable growth, the reason originated inharmonious political other sources VHLSS data was collected every two years and in even years, namely system 2004, 2006, 2008, 2010, 2012, 2014 and 2016 (Because this survey was only conducted in even years in research phase) Other data were taken by year from sources such as General Statistics Office, Provincial Statistical Offices, Ministry of Finance, Provincial Department of Finance and Vietnam Chamber of Commerce and Industry (VCCI) Afterwards, major international organizations such as the Asian Development Bank (ADB), the World Bank (WB), the Europe 2020 Strategy, the Organization for Economic Co-operation and Development (OECD), the United Nations Development Program (UNDP) and the World Economic Forum (WEF) also presented concepts of inclusive growth The main contents in the inclusive growth concepts of the aforementioned organizations are: Inclusive growth is multi-dimensional growth, Rodrik and Velasco (2005), Ramos et al (2013) all conducted study about employment, associated with equality of opportunities, which are created for everyone, not any labor and income specific person The two inseparable components of inclusive growth are pace and However, since inclusive growth is a multidimensional concept, the pillars (main pattern of indicators/aspects of economic growth The common feature in most content) in previous research about this topic are also very diverse From literature review international organizations’ concepts of inclusive growth is that it refers to both income of empirical studies, it is possible to summarize some of the key areas of growth including: and non-income aspects, as well as the process and outcome of growth The process here (i) economic growth, (ii) poverty and inequality, (iii) employment, (iv) education, indicates all opportunities in the economy that individuals, irrespective of their healthcare and demographic issues, (v) environment, (vi) gender / gender inequality, (vi) circumstances and status, can get access to, while the outcome of growth means the space, (vii) social safety nets and (viii) infrastructure equal distribution of growth results to everyone - leave no one behind In addition to international organizations, there are also a number of independent authors giving the concept of inclusive growth 1.2 Inclusive growth measurement methods 1.2.1 Concentration curve and concentration index method The concentration curve was developed by Kakwani (1977) based on the cumulative percentage of the measurement variable (vertical axis) compared to the Based on different views of concepts of inclusive growth by international cumulative percentage of the population (horizontal axis), households are arranged in organizations and independent authors, in this thesis, inclusive growth is considered as ascending order in average income, beginning with the lowest and ending with the a narrow meaning in which economic growth must go hand in hand with social equality highest income per capita households The concentration curve showed the cumulative (poverty reduction and inequality contraction), enhancing residents’ competents through percentage of measurement variables taken by the percentage of households with lowest improving access to education, health and other basic living conditions income per capita 1.1.2 The pillars (content) of inclusive growth The research conducted by Asian Development Bank (ADB) looked into inclusive growth under five perspectives: (i) income poverty, multidimensional poverty and inequality, (ii) creation of opportunities, (iii) access to opportunities, ( iv) social From the concentration curve, Kakwani (1977) calculated the concentration index to measure the level of socioeconomic inequality The concentration index can be stated as follows: safety nets, and (v) institutions and governance (Kakwani, 1977, 1980) (1) The African Development Bank (AfDB) study focused on five aspects of inclusive growth namely: economics, politics, society, environment and space Among them, economics and society are the two most crucial fields Specifically, economic In which is the measure of inequality, µ is its mean, and = is the ranking refers to growth and employment while society is a combination of factors such as order of the health, education, social safety nets and gender households with the lowest average income, and i = N for households with the highest The World Economic Forum (2015) suggested inclusive growth to be analyzed with household in its distributionbased on the average income, with i = for average income seven contents: Education and skills development, Employment and labor compensation, 1.2.2 Social opportunity function method Asset building and entrepreneurship, Financial intermediation of real economy investment, The social opportunity function method, first developed by Ali and Son (2007), Corruption and rents, Basic services and infrastructure, Fiscal transfer These were also the applied to non-monetary indicators Afterwards, Anand et al (2013) developed this idea for seven principal pillars of inclusive growth analysis given in the study of Sammans et al monetary indicators into the social mobility curve method (2015) The measurement method of inclusive growth reflects the increase in the social There were several other studies focused on analyzing the income and labor pillars opportunity function, depending on two factors: (i) the average opportunity created; (ii) and of inclusive growth In this group, there were studies by Anand et al (2013) and Hann and how to allocate opportunities among households in the economy Households with average Thorat (2013) looking at the aspect of income in inclusive growth Meanwhile, Hausman, income increase, and ȳp is the average opportunity taken by p percent of the lowest-income households (in which p fluctuates between and 100 and ȳ is the average opportunity 1.3.2 Theoretical foundation for the determinants of income inequality or available for the population), then ȳ will be equal to ȳ when p equals 100 (that means income distribution including the whole population) Because ȳ varies with p, we can draw a curve for each Factors affecting income inequality are usually divided into groups, namely: economic development, demographics, politics, culture and environment, and macroeconomic factors Each group consists of different representative elements So far, a number of studies have chosen to analyze the one or some of these factors value of p This is the curve that focuses overall opportunity when households are arranged in ascending order in average income The index represents the area below the opportunity curve, and is expressed mathematically as follows: ȳ*= ȳ ȳ* is opportunity index (2) To consider the issue of equality in opportunity distribution, we can develop and calculate the Equality of Opportunity Index (EOI) index as follows: = ȳ∗ ȳ (3) With the same principle, Anand et al developed the social opportunity function method to calculate the social mobility index for income criteria (also called the social mobility function method) 1.2.3 The composite index method The composite index method is a method of calculating inclusive development index based on the indices of individual indicators and assigning weights to those indicators The aggregate index is built on a scale of to 10, according to the degree of achievement of each country in each of these measurement dimensions with criteria The higher the score is, the greater the inclusion that country had in that component indicator 1.3 Theoretical foundation for inclusive growth determinants 1.3.1 Theoretical foundation of growth determinants Some of the theories of growth mentioned in this section are classical theories of Adam Smith (1776), David Ricardo and Karl Marx; theories of Keynesianism, including Harrod-Domar theory which focused on the role of capital in economic growth; Neoclassical theories, represented by the Slow Swan theory (1956) stated that, besides capital, labor and technology also affected growth Finally, there are endogenous growth model in Arrow and Romer theory with emphasis on human capital’s effect on a nation's economic growth In addition, the role of population growth was also mentioned in a variety of theories, including Thomas Malthus's population theory explaining the impact of the population on income per capita 9 with income inequality However, the findings of those studies revealed different impacts of differenr factors on income inequality The relationship is either positive or negative, while many factors did not show clear impact on income inequality Among those aforementioned factors, consistent results from past research were shown in: positive effects of technological progress, inequality in education and foreign investment on income inequality Meanwhile, financial development level affected income inequality negatively Additionally, some factors were researched by many scholars, although the impact might be heterogeneous, including GDP per capita, economic restructuring, education levels and spending, inflation, and unemployment 10 2.1.3 Other research on inclusive growth Besides inclusive growth studies using quantitative analysis, there were some other studies also investigated this topic but only stopped at analyzing the situation of growth on one or some aspects The number of these studies is much higher than the quantitative analysis research Some following studies can be stated as example: Yuwa (2014), Schmid (2014), Habito (2009), Ganesh and Ravi (2009), Osmani (2008), Fernando (2008), Norman et al (2007), Afzal ( 2007), Afzal and Jazhong (2007), Afzal and Xianbin (2004) and Bolt (2004) The main content analyzed in these researches was: economic growth, poverty, employment, institutions and infrastructure CHAPTER RESEARCH OVERVIEW OF INCLUSIVE GROWTH 2.2 Domestic research Inclusive growth is a relatively new concept in Vietnam, so there has not much 2.1 Foreign research research done on this topic Some studies in this group include: Le Kim Sa (2014), Pham 2.1.1 Research conducted for multi-country sample Minh Thai and Vu Thi Minh Ngoc (2014), Nguyen Duc Thanh and Pham Van Dai The full version of the thesis includes an overview of studies in which the (2014), Do Son Tung and Ma Ngoc Nga (2014), Le Kim Sa (2008) The content of dependent variable reflects inclusive growth in income, income per capita and income inclusive growth studies in Vietnam mainly analyzed the labor market of one or several inequality measurement However, this summary only focuses on research with enterprises in a certain industry, thereby made policy recommendations to improve the inclusive growth in income as dependent variable conducted for multi-country sample inclusion for that market Specifically, studies in this group included research by Anand et al (2013), Jalles Based on the overview of overseas empirical studies, together with domestic and Mello (2019), Doumbia (2018), Javed et al (2018), Aoyagi and Ganelli (2015), Sen research analyzing inclusive growth, the thesis found a big gap of inclusive growth in (2014), Ravi et al (2013) Although all of them focused mostly on the income aspect of income, especially from household perspectives Furthermore, no studies in Vietnam inclusive growth, these studies still varied widely in the selection of measurement have conducted quantitative analysis to investigate the impact of factors on inclusive variables for dependent and independent variables The main independent variables used growth in income in Vietnam were: GDP per capita, inflation, human development indicators such as education and healthcare, institutions and governance, investment, trade openness and government spending 2.1.2 Research conducted within one country 2.3 Research framework The thesis was conducted by following several steps: (i) identifying research objectives, (ii) reviewing the research materials, (iii) developing analytical framework, (iv) collecting, analyzing and processing data, (v) doing research findings and (vi) making policy recommendations There was some research conducted in one nation with inclusive growth of income as the dependent variable, such as: Studies of Arabiyat et al (2019), Munir et al (2018), Khan et al (2016), Pukuh and Widyasthika (2017), Oluseye and Gabriel (2017) The common point of these studies is that the dependent variable - inclusive growth of income was measured by the social mobility curve as proposed in Anand et al (2013) The independent variables mostly used in these studies were: GDP per capita, inflation, population growth, government spending, trade openness, and money supply growth Regarding the content of inclusive growth, this study analyzed six main groups: (i) economic growth, (ii) poverty and inequality, (iii) employment, (iv) education and health care, (v) space and (vi) infrastructure Within each group, one or more indicators would selected for analysis 11 12 Regarding quantitative analysis, the thesis developed analytical framework as However, while the poverty rate dropped, fluctuations recorded in the distribution follows: of the poor across the country The majority of poor people came from rural areas Whereas, if based on regional criteria, most poor people originated from the Midlands and Northern Mountains (in 2010 and 2016) Ratio of trained labor to total labor Some indicators reflecting the income inequality used were Gini, income Inflation between 20% of the richest population and 20% of the poorest population in the country, based on urban-rural areas and ethnicity showed different fluctuations Considering both Labor quality Education level Human resources criteria, inequality in urban areas reduced and recorded more volatile than in rural areas, Crisis Income inclusive growth ethnic minorities group (including Hoa and non-Kinh people) also followed the same GRDP Years of schooling Macro factors pattern compared to Kinh people The average growth rate of income in both urban and rural areas decreased more in the last years of the study period, this rate was highest in the period 2010-2012 in all six geographical regions The proportion of income in FDI Healthcare industry and services was still small, wages and salaries constituted the largest part in urban areas’ income, while in rural areas income mainly came from agricultural activities Provincial Competitiveness Index Budget spending 3.1.2 Inclusive growth of income in Vietnam Inclusive growth of income improved over all years throughout the study period, regardless of the scope of analysis However, this improvement was mainly explained Institutions and policies by the improvement in average income, which did not come from more equal income distribution 2010 was the year witnessing the most unequal household income Figure 1: Quantitative analysis framework of the research distribution in Vietnam, while the most equal distribution time was 2006 In terms of provinces and cities, there were also some notable changes coming from all three CHAPTER THE SITUATION OF INCLUSIVE GROWTH IN VIETNAM DURING THE 2004-2016 PERIOD 3.1 Situation of inclusive growth of income 3.1.1 Situation of economic growth and income distribution In general, Vietnam's economic growth in the past three decades since the Renovation implementation has achieved great results As a result, the proportion of poor households has decreased significantly, GDP per capita increased (In average, Vietnam's income per capita for the whole period 2004-2016 doubled, based on purchasing power parity in 2011) Vietnam has been one of the countries with high economic growth rate in the region In addition, the economic structure was also shifting in line with the trend of developing economies towards increasing the proportion of industry and services, reducing the proportion of agriculture indicators: income growth, equality growth and inclusive growth 3.2 The inclusive growth situation of some non-income indicators 3.2.1 Education, healthcare, labor and employment Education: The thesis analyzed the rate of joining school at the right age in all educational levels, by urban-rural area and by sex; and the highest number of schooling years of the member with the longest study time in the household to calculate the opportunity index The results indicated that the rate of joining school at the right age was lower with the higher levels of education, this rate in urban areas was higher than in rural areas, and also the rate recorded in females was higher than males Regarding the criteria of the longest time of schooling (by year), the equality was higher in urban areas than in rural areas and the same pattern shown among Kinh people compared to other ethnic groups 13 14 However, in all criteria, the opportunity index reflecting the inclusion of access Using Hausman test, the research chooses between two fixed and random effects to educational opportunities (measured by years of schooling) improved models Healthcare: Opportunity of accessing to healthcare was analyzed through access 4.1.2.2 Spatial econometric panel data model to health insurance and free health checks for citizens Considering this opportunity, in all criteria, inclusion increased over the years, except for the period 2006-2008 The spatial estimation method was used when there was suspicion of the spatial relationship among entities According to Le Gallo et al (2003), in measuring economic Labor and employment: The labor force participation rate and the percentage of trained workers were higher in both males and females relationships, ignoring spatial correlation may lead to biased and unreliable estimates This was also the spatial autocorrelation shown in several studies such as Paraguas and 3.2.2 Some other non-income indicators Kami (2005) or Higazi et al (2013) In this section, the study investigated the ability to access social security through the social insurance access rate in income groups and access to basic living conditions such as electricity, water and sanitation The rate of social insurance coverage decreased gradually according to income groups, with large disparities among groups In each group, this rate reduced during 2006-2010, but improved over the rest of the time In addition, regarding inclusion of the three basic types of access, the opportunity to access electrical grid was highest, followed by sanitation and finally tap water The thesis created the spatial matrix according to distance and conducted necessary tests to select the appropriate spatial model After finishing the tests, the selected spatial model was the Spatial Autoregressive Model with Auto Regressive disturbances In addition, the construction of different matrix types also tested the robustness check of the model The results indicated that there was not much difference when selecting different types of matrices to make estimates In other words, the robustness of the model was confirmed 3.3 Some constraints to inclusive growth in Vietnam Despite many achievements in growth and poverty reduction, inclusive growth in Vietnam has been facing many challenges and limitations One of them can be stated such as (i) uneven growth, (ii) low employment and labor productivity, (iii) large gaps in asset holdings and access to opportunities in life 4.2 Data sources, data descriptions and variables used in the estimation model 4.2.1 Data sources 4.2.1.1 Characteristic of provincial data According to the government decision, from the beginning of August 2018, all Ha Tay, Me Linh district of Vinh Phuc province, and communes of Luong Son district, CHAPTER Hoa Binh province were merged into Hanoi Therefore, for data consistency, all data of ESTIMATION OF FACTORS AFFECTING INCOME INCLUSIVE GROWTH IN VIETNAM 4.1 Model specification before 2010 was be calculated as Hanoi data 4.2.1.2 Source of data identification 4.1.1 Model building The dependent variable is the inclusive growth of income, which was calculated The thesis built an econometric model to analyze the impact of factors on inclusive growth of income for provinces and cities of Vietnam as follows: = 4.1.2 Estimation method Me Linh district in Vinh Phuc province and data of communes in Hoa Binh province + + as the social mobility index according to the social mobility function method of Anand et al (2013), using data of average household income in VHLSS (4) The thesis applied the Panel data regression estimation method: conducted with Independent variable: The data for the independent variable used the secondary data source from the General Statistics Office, the Statistical Office of provinces, the Ministry of Finance, the provincial Department of Finance, and Vietnam Chamber of fixed / random effects estimator and spatial estimator Commerce and Industry (VCCI) Only the inclusion index of education as independent 4.1.2.1 The fixed and random effects estimator variable was calculated from the data in VHLSS by using of the social opportunity function method of Ali and Son (2007) 15 16 All independent variables in the model were: GRDP per capita in the first period, lfdi inflation, dummy variable (shown for crisis factor), the ratio of investment to GRDP, Foreign Direct Investment (FDI), the ratio of trained labor to total labor, the inclusion lpci index of education, the human resources for health per capita, the provincial competitiveness index (PCI), and local budget expenditures 0.17** (0.08) 0.06*** (0.01) (0.01) ledu 0.32*** 0.25*** (0.10) (0.09) labor_tyle 1.36*** 0.99*** (0.24) (0.22) lyte2 -0.05** -0.10*** (0.02) (0.02) Constant -1.32*** -1.71*** (0.40) (0.37) 365 per capita Variables with negative expectation: Inflation -0.00 0.06*** of investment to GRDP, the ratio of trained labor to total labor, the inclusion index of education, the provincial competitiveness index (PCI), the human resources for health (0.01) lchins expected as follows: Variables with positive expectation: GRDP per capita in the first period, the ratio -0.00 (0.01) (0.08) 4.2.2.2 Expected sign of the variables Based on the overview of past research in chapter 2, the signs of variables were -0.01** Variables with unclear expectation: The dummy variable for crisis, local budget expenditures, Foreign Direct Investment (FDI) Observations 365 4.3 Model results R-squared 0.85 4.3.1.1 Descriptive statistics and correlation matrix among variables Number of mun The table showing descriptive statistics and correlation among variables was Hausman test presented in the full text of the thesis 4.3.2.1 Test results of fixed and random effect model The Hausman test results showed that the value Prob> chi2 = 0.0000, therefore the fixed effects estimation model was selected The specific estimation results were as follows Table 1: Test results of FE model and RE model without space factor (1) (2) VARIABLES FE RE lgdppop2004 0.29*** 0.32*** (0.07) (0.04) lcpi1 63 0.0000 Standard errors in parentheses 4.3.2 Estimating the fixed and random effect model i_gdp 63 Prob>chi2 = 0.48*** 0.11 (0.14) (0.12) -0.35*** (0.04) -0.35*** (0.03) *** p