The Vietnam economic reform launched in 1986 has brought about encouraging
results. However the economic growth also leads to increased inequality. This
may mitigate the efficiency of poverty reduction policies of the Government of
Vietnam. There have been a number of studies on different aspects of poverty
and expenditure inequality as well as its increasing trend in Vietnam. Much less
is known, however, about the driving forces of this trend and their quantitative
contributions. Conventional decompositions, by factor components or by
population subgroups, only provide limited information on the determinants of
income inequality. Besides, there is a lack of quantitative studies on poverty in
recent years in Vietnam. This paper represents an attempt to apply the
regression-based decomposition framework to the study of inequality in
identifying its trends through years using the Vietnam Living Standard Surveys
data in 1998, 2002, 2004, 2006 and 2008. It found out that principal factors
increasing expenditure per capita are the larger proportion of household member
at working age, the smaller household size, higher education level, rural and
urban location and regions. After reviewing policies which have been
implemented so far, it can be concluded that some policies seemingly have been
properly targeted the poor as expected.