The trend of inequality in income distribution in Vietnam 2016-2020 period (2024)

Income inequality is the difference in income and wealth between individuals, groups within a society or between countries. Income inequality occurs in most countries around the world, including Vietnam.

In the period 2016-2020, Vietnam’s economy grew at an average rate of 6.78% in the period 2016-2019 and 2020 due to the impact of the covid-19 pandemic negatively affecting the economic sectors. Socio-economic, our country still achieved the highest growth rate in the world with an increase of 2.91%. Economic achievements have spread to the lives of all classes of people in society. The income of population groups increased from 3.1 million VND/month/person in 2016 to 4.2 million in 2020, but the income growth rate of the poorest group is always lower than that of the richest group, so the gap between rich and poor increasingly increasing. However, income inequality among classes of the population is decreasing as the GINI coefficient decreases from 0.431 in 2016 to 0.373 in 2020.

Through the GINI coefficient in the period 2016-2020, it shows that income inequality in our country does not fluctuate much, decreasing from 0.431 to 0.373 and is within a safe, efficient and suitable threshold for high growth. In urban, people are more equal and easier to access development opportunities in terms of education and work skills through education, so income inequality is always lower than in rural.

. In 2016, the GINI coefficient in urban areas is 0.391, decreasing to 0.325 in 2020, this index in rural areas is 0.408 and 0.373 respectively.

In the regions, due to the difference in natural conditions, cultural level, production level, infrastructure and education level, comparative advantages between… these characteristics make development possible. There are clear differences between regions and make income disparities as well as inequalities between population groups in different regions markedly different. GINI coefficients in all economic regions tend to decrease, the inequality gap is narrowing. The two major economic regions of the country, the Red River Delta and the Southeast, are developed economic regions with high growth rates compared to other regions, the GINI coefficient has a sharp and low rate of decrease compared to other regions. other areas.

Table 1. GINI coefficient for the period 2016-2020

The level of income inequality is also reflected in the difference between the incomes of groups 1 and 5. The incomes of 20% of the lowest income groups and 20% of the highest income groups both increased over the period. 2016-2020, however, the income gap between these two groups is getting bigger and bigger, which shows the growing gap between rich and poor. In 2016, the per capita income of the lowest income group was 791 thousand VND, an average increase of 5.7% in the period 2016-2019; the highest income group was VND 7.8 million, up 6.8%. The income growth rate of the low-income group is slower than that of the high-income group, making the gap between the rich and the poor widen. In 2016, the income of the highest-income group was 9.8 times higher than that of the lowest-income group. in 2019 is 10.2. However, by 2020, due to the negative impact of the covid-19 epidemic and the effectiveness of social security policies for the poor and family, the low-income group will increase by 7.6%. in the period 2016-2020 much faster than the growth of 3.3% of the highest income group, which has reduced the income difference between these two groups to only 8 times.

Table 2: Difference between the lowest and highest income groups in the period 2016-2020

Notes: (1) Income gap between group 5 and group 1; (2) Number of times the income gap between group 5 (richest) and group 1 (poorest)

In urban areas, the rich-poor divide between the lowest and highest income groups tends to decrease from 7.6 times in 2016 to 7.2 times in 2019 and only 5.3 times in 2020 due to The impact of the Covid-19 epidemic caused the high-income group to decrease while the low-income group still tended to increase. Rural areas tend to be opposite to urban areas when the income gap between the two lowest and highest groups increases from 8.4 times in 2016 to 9.6 times in 2019, but in 2020 it will decrease only 8 times due to the overall impact of the Covid-19 epidemic on the entire economy.