Private Inter-household Transfers in Vietnam in the Early and Late 1990’s

This chapter uses data from the 1992/93 and 1997/98 Vietnam Living Standards Surveys (VLSS) to describe patterns of money transfers between households. Rapid economic growth during the 1990’s did little to diminish the importance of private transfers in Vietnam. Private transfers are large and widespread in both surveys, and they are much larger than public transfers are. Private transfers appear to function like means-tested public transfers, flowing from better off to worse off households and providing old-age support in retirement. Panel evidence suggests some hysteresis in private transfer patterns, but many households also changed from recipients to givers and vice versa between surveys. Changes in private transfers appear responsive to changes in household pretransfer income, demographic changes and life-course events. Transfer inflows rise upon retirement and widowhood, for example, and are positively associated with increases in health expenditures. It also appears that private transfer inflows increased for households affected by Typhoon Linda, which devastated Vietnam’s southernmost provinces in late 1997. ________________________________________________________________________________ * Correspondence [email protected] . This paper has been prepared as part of the World Bank funded project “Economic Growth and Household Welfare – Policy Lessons from Vietnam” directed by co-principal investigators David Dollar and Paul Glewwe. I thank Paul Glewwe for comments on earlier drafts and Emanuela Galasso for help with the 1997/98 VLSS data. The support of the World Bank’s research committee is gratefully acknowledged.