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-po...

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Main Author:	van de Walle, Dominique
Format:	Publications & Research
Language:	en_US
Published:	World Bank, Washington, DC 2015
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

id	okr-10986-21367
recordtype	oai_dc
spelling	okr-10986-213672021-04-23T14:04:01Z Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam van de Walle, Dominique 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 human capital physical capacity educational indicators market reforms inequity agricultural productivity educational equalization credit markets demographic indicators educational level income generation irrigation development 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. 2015-01-30T15:23:08Z 2015-01-30T15:23:08Z 2000-08 http://hdl.handle.net/10986/21367 en_US Policy Research Working Paper;No. 2425 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Vietnam
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	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 human capital physical capacity educational indicators market reforms inequity agricultural productivity educational equalization credit markets demographic indicators educational level income generation irrigation development
spellingShingle	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 human capital physical capacity educational indicators market reforms inequity agricultural productivity educational equalization credit markets demographic indicators educational level income generation irrigation development van de Walle, Dominique Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam
geographic_facet	Vietnam
relation	Policy Research Working Paper;No. 2425
description	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.
format	Publications & Research
author	van de Walle, Dominique
author_facet	van de Walle, Dominique
author_sort	van de Walle, Dominique
title	Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam
title_short	Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam
title_full	Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam
title_fullStr	Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam
title_full_unstemmed	Are Returns to Investment Lower for the Poor? Human and Physical Capital Interactions in Rural Vietnam
title_sort	are returns to investment lower for the poor? human and physical capital interactions in rural vietnam
publisher	World Bank, Washington, DC
publishDate	2015
url	http://hdl.handle.net/10986/21367
_version_	1764448054629367808

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

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