The Effect of Urbanization on Vietnam's Unequal Income Distribution

This study analyzes the impact of urbanization on income inequality in Vietnam using panel data regression methods, specifically applying the Random Effects Model (REM) and Feasible Generalized Least Squares (FGLS) to assess the effects of urbanization on income inequality. The dataset comprises information from 63 provinces and cities in Vietnam from 2013 to 2023, ensuring the study's feasibility and reliability by capturing diverse socio-economic characteristics. The estimation results indicate an inverted U-shaped relationship between urbanization and income inequality. In the initial stages, urbanization increases income inequality; however, after surpassing a certain threshold, further urbanization helps reduce inequality. Based on these findings, the authors propose relevant policy implications to mitigate income inequality at different stages of urbanization across localities.