We examine whether structural transformation leads to growth and income inequality in
Viet Nam. Using three rounds of the Vietnam Household Living Standards Survey (2002,
2006, and 2010), we estimate re–centered influence functions to construct a decomposition
analysis. Our results indicate that Viet Nam continues to experience sustained structural
transformation and growth, but this growth is heterogeneous across regions. The growth
exhibits pro–rich gains, with returns to agriculture and manufacturing increasing only for the
top 10 to 20th percentiles. We also find that such growth increases income inequality in
Viet Nam, and change in income inequality is heterogeneous across regions. Differences in
growth and income inequality are driven by differences in the rate of industrialisation across
regions and by structural effects such as access to seaports. For a more inclusive growth,
access to non-farm activities may need to be increased for households that are not in areas
with high levels of structural transformation.