Livelihood Choice and Household Economic Wellbeing in Vietnam’s Northwest region

Abstract

This paper examines factors affecting livelihood choices in the Northwest region, the country’s poorest one, populated mainly by ethnic minorities. We utilized secondary data from the Vietnam Household Living Standard Surveys (VHLSS) in 2016 and 2018, and applied micro-econometric analysis. Our cluster analysis results offer the initial classification into six livelihood groups characteristic of rural households. Bonferroni pairwise tests are used to compare per capita income and poverty rates across livelihood options. We discovered that households with nonfarm or formal wage-earning livelihoods had the highest levels of income and the lowest poverty rates, while those reliant on the cultivation of crops had the lowest income and the highest poverty levels. A multinomial logit model is used to explore factors affecting livelihood choice. We found that ownership of more cropland reduces the likelihood of choosing high-return livelihoods. Furthermore, household head education has a beneficial effect on the pursuit of profitable occupations,  meaning that improved education could lead to households shifting away from low-return activities. We also discovered that households in communes with available transportation are more likely to adopt high-return livelihoods.