Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam

If the marginal gains from investment in physical capital depend positively on knowledge, but a household cannot hire skilled labor to compensate for low skills, then even if it has access to credit, the household will achieve lower returns than an educated household. If, as is common, the income-poor are less educated because of failures in the credit market, and because they live in areas where there is less access to schooling, then the poor will also have lower returns on investments. The author tests this argument for the case of irrigation infrastructure in Vietnam. She asks how a household's education level, and demographic characteristics influence the gains to household income from irrigating previously unirrigated land. The next marginal benefit of irrigation increases strongly with the education of a household. The results suggest that unless disparities in education are addressed, market-oriented reforms will generate inequitable agricultural growth in Vietnam.

Bibliographic Details

Main Author:	van de Walle, Dominique
Language:	en_US
Published:	World Bank, Washington, DC 2000-08
Subjects:	accounting, agricultural cooperatives, agricultural extension, agricultural production, agriculture, capital markets, comparative advantage, consumption expenditures, crops, decentralization, demographics, development economics, development projects, economic development, economic growth, economics, elasticities, elasticity, employment, equilibrium, equipment, expenditures, extension, extension services, farmers, farms, gender, growth theories, health care, health outcomes, housing, human capital, income, incomes, increasing returns, informal sector, insurance, labor inputs, labor markets, labor productivity, labor supply, livelihoods, livestock, living standards, marginal benefits, marginal product, marginal products, marginal value, market failures, market mechanism, migration, new technologies, NGOs, nutrition, oil, planned economy, policy research, poverty line, production costs, production functions, productivity, public health, rural development, safety nets, savings, social development, social services, time series, total revenue, transport, variable costs, wages, water supply, wealth, investment returns, poverty incidence, physical capacity, educational indicators, market reforms, inequity, agricultural productivity, educational equalization, credit markets, demographic indicators, educational level, income generation, irrigation development,
Online Access:	http://hdl.handle.net/10986/21367
Tags:	Add Tag No Tags, Be the first to tag this record!