Household Income and Child Schooling in Vietnam

Abstract

The stronger are the associations between household income and child schooling, the lower is intergenerational social mobility and the less equal is opportunity. This study estimates the associations between household income and children's school success in Vietnam. The estimates indicate that these associations are considerable. For example, the income elasticity of completed grades is five times the median estimate of earlier studies. Moreover, this association is strongest for grades completed per year of school, not for completed grades, on which most of the previous literature has focused. There are some gender differences, the most important being a smaller association between income and grades completed per year of school for boys than for girls. This difference implies that schooling of girls is treated as more of a luxury (less of a necessity) than is schooling of boys. This article also investigates some ways in which policies relate to household incomes. School fees are progressive, but school fees are only about one-third of what households pay directly to schools and are a much smaller proportion of a household's total school-related expenditures. Total household expenditures paid directly to schools increase with household income less proportionately than do school fees alone, so the overall structure of such payments is less progressive than is the structure of school fees. Because school enrollment is positively related to household income, moreover, the structure of school fees is less progressive for the entire population than for the selected subset that has children enrolled in school. Further, the two school quality measures that have the strongest positive association with children's school success are much more available to higher-income households, meaning that higher-income households have greater school expenditures in part because they are obtaining higher-quality schooling and not because charges for the same quality schooling are progressive across income classes.