The Role of Education in the Livelihood of Households in the Northwest Region, Vietnam

Overview & Synopsis

Using the updated data from the 2016 Vietnam Household Living Standard Survey, this study examines the role of education in the livelihood of households in the Northwest region, the poorest region in Vietnam. Our micro-econometric analysis shows that education has a positive effect on choosing better livelihoods, household income and poverty reduction, even after controlling for all other factors in the models. However, our quantile regression analysis reveals that the returns on education are substantially heterogeneous across percentiles of income distribution and tend to be higher for better-off households. This implies that education has an increasing effect on within-level income inequality. The finding suggests that a conventional approach employing only mean regression to study the effect of education on income could miss heterogeneity of interest to policymakers.