Empirical Essays on Poverty, Inequality, and Social Welfare

This thesis consists of three empirical chapters related to distributional outcomes, such as poverty and inequality, in three different contexts.Chapter 1 outlines a class of statistical procedures that permit testing of a broad range of multidimensional stochastic dominance hypotheses. We apply the procedures to data on income and leisure hours for individuals in Germany, the UK, and the USA. We find that no country first-order stochastically dominates the others in both dimensions for all years of comparison. Furthermore, while in general the USA stochastically dominates Germany and the UK with respect to income, in most periods Germany stochastically dominates with respect to leisure hours. Finally, we find evidence that bivariate poverty is lower in Germany than in either the UK or the USA. On the other hand, poverty comparisons between the UK and the USA are sensitive to the subpopulation of individuals considered.Chapter 2 provides a detailed description of the evolution of income inequality in Vietnam between 1993 and 2006. We construct consistent estimates of annual household income using five nationally representative household surveys. Our main finding is that Vietnam’s rapid growth was accompanied by a reduction in inequality between 1993 and 2002 and an unchanged level of inequality between 2002 and 2006. We find that strong growth in employment income and robust growth of cropping income played an important role in decreasing rural inequality, while the growth of wage income and the stagnation of household business income similarly contributed to the reduction in urban inequality.Chapter 3 examines the impacts of the 2001 U.S.-Vietnam Bilateral Trade Agreement on provincial poverty level in Vietnam. My main finding is that provinces that were more exposed to the U.S. tariff cuts experienced faster decreases in poverty between 2002 and 2004. I subsequently explore three labour market channels from the trade agreement to poverty alleviation. Provinces that were more exposed to the tariff cuts experienced (1) increases in provincial wage premiums for low-skilled workers, (2) faster movement into wage and salaried jobs for low-skilled workers, and (3) more rapid job growth in formal enterprises.