Household enterprises in Vietnam : survival, growth, and living standards

In Vietnam almost a quarter of adults worked in nonfarm household enterprises in 1998. Based on household panel data from the Vietnam Living Standards Surveys of 1993 and 1998, the authors find some evidence that operating an enterprise leads to greater affluence. The data show that nonfarm household enterprises are most likely to be operated by urban households, by those with moderately good education, and by the children of proprietors. The authors were able to construct a panel of nonfarm household enterprises; 39 percent of enterprises operating in 1993 were still in business in 1998. Those in the (more affluent) south of the country were less likely to survive, as were smaller and younger businesses. A pattern emerges from the data. In poor areas the lack of education, credit, and effective demand limits the development of nonfarm household enterprises. In rich areas there is the attraction of wage labor. Nonfarm household enterprises are thus most important in the period of transition, when agriculture is declining in importance but before the formal sector becomes established. The authors expect these enterprises to continue to play a modest supporting role in fostering economic growth in Vietnam.Public Health Promotion,Housing&Human Habitats,Banks&Banking Reform,Municipal Financial Management,Microfinance,Banks&Banking Reform,Municipal Financial Management,Small and Medium Size Enterprises,Private Participation in Infrastructure,Microfinance

Ethnic minority development in Vietnam : a socioeconomic perspective

The authors examine the latest quantitative evidence on disparities in living standards between and among different ethnic groups in Vietnam. Using data from the 1998 Vietnam Living Standards Survey and 1999 Census, they show that Kinh and Hoa ("majority") households have substantially higher living standards than"minority"households from Vietnam's other 52 ethnic groups. Subdividing the population into five broad categories, the authors find that while the Kinh, Hoa, Khmer, and Northern Highland minorities have benefited from economic growth in the 1990s, the growth of Central Highland minorities has stagnated. Disaggregating further, they find that the same ethnic groups whose living standards have risen fastest are those that have the highest school enrollment rates, are most likely to intermarry with Kinh partners, and are the least likely to practice a religion. The authors then estimate and decompose a set of expenditure regressions which show that even if minority households had the same endowments as Kinh households, this would close no more than a third of the gap in per capita expenditures. While some ethnic minorities seem to be doing well with a strategy of assimilating (both culturally and economically) with the Kinh-Hoa majority, other groups are attempting to integrate economically while retaining distinct cultural identities. A third group comprising the Central Highland minorities, including the Hmong, is largely being left behind by the growth process. Such diversity in the socioeconomic development experiences of the different ethnic minorities indicates the need for similar diversity in the policy interventions that are designed to assist them.Anthropology,Primary Education,Social Inclusion&Institutions,Health Monitoring&Evaluation,Public Health Promotion,Primary Education,Health Monitoring&Evaluation,Anthropology,Poverty Assessment,Gender and Education

Impacts of Trump tax reforms on growth, inequality and debt

Reforming the tax system of the US has become a major policy agenda of the Trump administration. After months of negotiations the “Big Six”, including the Treasury Secretary, National Economic Director, Republicans in the House and the Senate are gradually converging on the degree and scale of tax reforms. What will be the impacts of such reforms on growth, efficiency and redistribution of income among households is an issue of immense interest among the American people. We provide summary of findings of study conducted by a team of economists in the University of Hull in England and Suffolk University in Boston for the National Centre for Policy Analysis that have also been published in refereed journals

The economic effects of the fair tax: analysis of results of a dynamic CGE model of the US economy

By replacing the current income tax with a national sales tax, the FairTax proposal would end the double taxation of saving inherent in the existing tax code and, by doing so, raise output, employment, investment and capital stock relative to the benchmark economy. While these positive effects would be felt almost immediately, the FairTax is very much an investment in the future. Its full benefits would be realized only after the economy achieved a new “steady state,” some 20–25 years into implementation. Only by that point, will the effects on growth have been fully absorbed into the economy and the wellbeing of most households across most income groups improved. The policy choice, then, is between the status quo, and a new policy that would inflict some short-run pain as the price of a permanently expanded economy

Does the village fund matter in Thailand ?

This paper evaluates the impact of the Thailand Village and Urban Revolving Fund on household expenditure, income, and assets. The revolving fund was launched in 2001 when the Government of Thailand promised to provide a million baht (about $22,500) to every village and urban community in Thailand as working capital for locally-run rotating credit associations. The money – about$2 billion in total – was quickly disbursed to locally-run committees in almost all of Thailand’s 74,000 villages and more than 4,500 urban (including military) communities. By May 2005, the committees had lent a total of about $8 billion, with an average loan of$466. Using data from the Thailand Socioeconomic Surveys of 2002 and 2004, each of which surveys almost 35,000 households, the authors find that the borrowers were disproportionately poor and agricultural. A propensity score matching model finds that Fund borrowing in 2004 was associated with, on average, 1.9 percent more income, 3.3 percent more expenditure, and about 5 percent more ownership of durable goods. These results are broadly consistent with the results from instrumental variables models (where the identifying instrument was the inverse of village size), which however show a smaller (marginal) effect. Households that borrowed both from the revolving fund and from the Bank of Agriculture and Agricultural Cooperatives gained substantially more in terms of higher income than those who borrowed from either one or the other or from neither.Access to Finance,,Debt Markets,Economic Theory&Research,Rural Poverty Reduction

Fiscal policy, growth and income distribution in the UK

Income and income inequality increased substantially in the UK during the industrial revolution. Income inequality was the highest around 1880. This triggered enactments of more egalitarian tax and transfer system, which halved income inequality by the 1960s. Inequality has risen again with fiscal system reforms in the last five decades. By analysing solutions of a dynamic computable general equilibrium (DCGE) model we show how policies could be designed for the optimal equitable paths of UK economy in the 21st century

Simulating corporate income tax reform proposals with a dynamic CGE model

Opinion leaders and policy makers in the United States have turned their focus to the corporate income tax, which now has the highest statutory rate in the developed world. Using a dynamic computable general equilibrium model (the “NCPA-DCGE Model”), we simulate alternative policies for reducing the U.S. corporate income tax. We find that reductions in the corporate income tax rate result in significant positive impacts on output, investment, capital formation, employment, and household well-being (for almost all deciles). All of the hypothesized reforms also result in a more-streamlined public sector. These results are plausible insofar as the DCGE model from which they are obtained is parameterized by plausible elasticity assumptions, and incorporates the adjustments in prices, output, employment and investment that result from changes in tax policy

Fiscal Policy, Growth and Income Distribution in the UK

Income and income inequality increased substantially in the UK during the industrial revolution. Income inequality was the highest around 1880.This triggered enactments of more egalitarian tax and transfer system, which halved income inequality by the 1960s. Inequality has risen again with fiscal system reforms in the last five decades. By analysing solutions of a dynamic computable general equilibrium (DCGE) model we show how policies could be designed for the optimal equitable paths of UK economy in the 21st century

Evaluating the impact of Egyptian social fund for development programs

The Egyptian Social Fund for Development was established in 1991 with a mandate to reduce poverty. Since its inception, it has disbursed about $2.5 billion, of which nearly two-fifths was devoted to supporting microcredit and financing community development and infrastructure. This paper investigates the size of the impact of the Fund’s interventions, whether the benefits have been commensurate with the costs, and whether the programs have been targeted successfully to the poor. The core of the impact evaluation applies propensity-score matching to data from the 2004/2005 national Household Income, Expenditure and Consumption Survey. The authors find that Egypt’s Social Fund for Development programs have had clear and measurable effects, in the expected direction, for all of the programs considered: educational interventions have reduced illiteracy, health and potable water programs have lowered household spending on health, sanitation interventions have cut household spending on sanitation and lowered poverty, and road projects have reduced household transportation costs by 20 percent. Microcredit is associated with higher household expenditures in metropolitan areas and urban Upper Egypt, but not elsewhere. The Social Fund for Development’s road projects generate benefits that, by some estimates, exceed the costs, as do health and potable water interventions; this is less evident for interventions in education and sanitation. The Fund argues that its mission is primarily social, and so should not be judged using a cost-benefit analysis. The Fund support for microcredit is strongly pro-poor; the other programs analyzed have a more modest pro-poor orientation.Health Monitoring&Evaluation,,Rural Poverty Reduction,Housing&Human Habitats,Population Policies

The distributional effects of the Trump and Clinton tax proposals

Hillary Clinton and Donald Trump, the Democratic and Republican candidates for President of the U.S. in 2016, proposed several changes in the federal tax code. Hillary Clinton would add a personal income tax surcharge of 4% on high annual incomes, limit the tax benefits of non-charitable deductions, set a minimum tax rate of 30% on taxpayers earning more than one million dollars a year, increase the tax rates on capital gains for taxpayers in the top tax bracket, and expand the base of the estate tax. Donald Trump would reduce the number of personal income tax rates, increase the standard personal deduction, cut all taxes on business income to no more than 15%, and abolish the inheritance tax. Using a tax calculator model, we estimate the static effects of these very different changes. Over a ten-year period, Clinton’s proposals would raise federal tax revenue by a total of $816 billion, an increase of 1.9$9.8 trillion. Clinton’s higher taxes would reduce incomes and revenue somewhat, while Trump’s tax cuts would potentially boost output substantially. Using an extended simulation model, we find that 86% of the incremental tax burden of Clinton’s tax increases would fall on those in the top tenth of the income distribution. Most other taxpayers would see only minor changes in their tax burdens, and the revenue and redistributive effects of her proposed changes are relatively modest. Meanwhile, 70% of Trump’s tax cuts would go to those in the top decile, and the effects are large, with gains of over $15,000 annually per person for this group, compared to gains of less than$500 per person for the poorest 40% of the population. On tax policy, the two candidates propose strikingly different policies