Date of Award
Spring 2024
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Economics
First Advisor
Kortum, Samuel
Abstract
Spatial inequality and demographic imbalances are pressing concerns in many developing countries, as they can hinder economic growth, social stability, and overall well-being. This dissertation examines the effects of policy interventions on spatial inequality and demographic outcomes in the unique context of Vietnam. The first chapter quantifies the impact of place-based tax incentives and eased migration barriers on spatial inequality, while the second chapter investigates the relationship between trade liberalization and the elevated sex ratio at birth (SRB). In the first chapter, I develop a dynamic general equilibrium model that allows for rich interactions between place-based and migration policies, government services, and people's responses. The model incorporates the potential trade-off between attracting firms through place-based tax incentives and the cost to the government budget, as revenue depends on both the number of firms and tax rates. Furthermore, reducing migration barriers to cities can lead to an influx of workers and firms due to agglomeration forces, which may exacerbate inequality. However, this influx can also congest public services like hospitals and schools which both workers and firms value. Consequently, the effects of place-based policies and easing migration barriers on regional inequality are ambiguous, necessitating a quantitative analysis in the specific context of Vietnam. To quantify these effects, I use detailed micro-level data and novel identification strategies that integrate reduced-form equations with quasi-experimental methods. By exploiting actual policy changes in difference-in-differences frameworks, I identify the firm entry elasticity and changes in migration costs. My analysis yields three key findings: (1) place-based tax incentives effectively reduce spatial inequality by attracting firms without substantially compromising public services; (2) easing migration barriers to developed areas reduces inequality but also lowers welfare in these cities; and (3) combining tax incentives in underdeveloped regions with lower migration barriers to developed areas is more effective at reducing spatial inequality than implementing either policy in isolation. The second chapter connects Vietnam's elevated sex ratio at birth to the 2001 US-Vietnam Bilateral Trade Agreement (BTA). I develop a quantity-quality model to consider the impact of trade shocks on SRB through three distinct channels: income, relative returns, and fertility. Using household data and a difference-in-difference design, I compare outcomes for parents who experienced different tariff shocks before and after the BTA enactment. The results support the model predictions, with the strongest evidence favoring the fertility channel. Mothers exposed to greater tariff reductions experience an increase in male infants, a decrease in their likelihood of giving birth, and an increase in work hours. Overall, this dissertation contributes to our understanding of the effects of policy interventions on spatial inequality and demographic outcomes, providing tools and insights for policymakers seeking to address these issues. The findings highlight the importance of considering the dynamic decisions of entrepreneurs, congestion, public service provision, and occupational choices when assessing the impact of place-based incentives and migration policies on spatial inequality. Furthermore, the study reveals the unexpected demographic consequences of trade liberalization, emphasizing the interplay between economic forces and cultural factors in shaping fertility and sex-selective decisions.
Recommended Citation
Huynh, Nghiem Quang, "Effects of Internal Migration, Trade Liberalization, and Place-Based Tax Policies on Inequalities in Vietnam" (2024). Yale Graduate School of Arts and Sciences Dissertations. 1418.
https://elischolar.library.yale.edu/gsas_dissertations/1418
