The objectives of this study are to identify the underlying determinants of the schooling dropout in Vietnam and to project its trend in the future up to 2015. Our examination is largely based on the three Vietnam’s Living Standard Surveys conducted in 1992/93, 1997/98 and 2001/02 and the conventional framework of educational investment at the household level. The major determinants of the schooling dropout choice by households are found to be variables of child’s characteristics (such as age, working time, primary education, and number of siblings) and household economic situation (such as parental education, household’s per capita expenditure, and cost of schooling). In general, the effects of these determinants on the schooling dropout probability are statistically significant. In particular, the schooling dropout probability has been very sensitive to the changes in the household’s per capita expenditure and the direct costs of schooling, whereas recently the other determinants have had only minor impacts. In terms of schooling, girls have benefited more than boys did from their household's per capita expenditure increase, while they have suffered more than boys did from an increase in the direct cost of schooling. These differences, however, recently have narrowed substantially. The dropout situation is also regional specific and hence, a comprehensive approach is needed to deal with it. Moreover, at present the low quality of education is serious problem. Together with the parents' incorrect perception of and the community’s attitude to education values, this may increase the possibility of children’s schooling dropout. The dropout situation is also very much dependent on the public funding for education, which is still not effective in reducing the household current excessive financial burden and still biased against the poor regions. The projection outcomes of the schooling dropout probability of children in the future up to 2015 is very much depending on the assumptions of the changes in the household’s per capita expenditure and the cost of schooling. When the growth rate of the cost of schooling is much higher (for example, by 1.2 percentage points) than that of the household’s per capita expenditure, the dropout rate would first decrease and increase again after 2010. The tentative assessments suggest that in these cases, there is a chance for Vietnam to achieve the national targets of the primary and lower secondary net enrolment rates in 2010. However, Vietnam could very hardly to achieve the MDG on the universal completion of primary education in 2015 and moreover, the achievements recorded by 2010 would be deteriorated. Regarding the scenarios, where the pace of changes in the cost of schooling is lower than that of the household’s per capita expenditure, the projections seem to provide a rather bright picture in terms of achieving the national education targets in 2010 and the MDG on education in 2015. The projections also show that there is a reason to be more optimistic about the elimination of the gender gap in education by 2010.
