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Social Cohesion Policy Review of Viet Nam

image of Social Cohesion Policy Review of Viet Nam

This report examines the effects of recent economic growth in Viet Nam on social cohesion. It finds that recent rapid economic growth in Viet Nam has not resulted in an increase in overall inequality, but the level of inequality was already high. Growth was not particularly inclusive, benefiting most the middle class and the richest households, and favouring less households in the bottom 20th percentile. Income mobility was also high, and while a majority of households experienced upward income mobility, downward absolute income mobility affected one in five households. Economic growth was not particularly job rich with employment growth lagging behind economic expansion.

In particular, important challenges were identified in the area of education and skills policies relating to fast-changing labour market needs. Minimum wage policies had a small but positive effect on employment, but concerns were highlighted over partial coverage and weak compliance. Tax policy and specifically personal income tax had only a small impact on reducing inequality, but transfers from central to local governments produced an equalising effect, albeit with mixed results in terms of satisfaction with public services. Finally, social protection systems have been extended, but important coverage gaps remain among the poor and ethnic minority groups, and informality remains a key challenge for universal extension.

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Social cohesion at a crossroads in Viet Nam

OECD Development Centre

This chapter starts by examining the inclusiveness of recent economic growth, focusing on the distribution of income growth, income inequality and the employment intensity of growth. It then discusses the extent to which location, ethnicity, gender and age may shape the distribution of key social outcomes. The chapter offers an overview of intra-generational and inter-generational mobility in Viet Nam, highlighting three important dimensions of social mobility: income, labour and education. Finally, it investigates ways in which rapid growth has affected Vietnamese people’s relations with each other and the government, their involvement in social networks, and social norms and family values.

English

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