The Role of the Private Sector in Education in Vietnam: Evidence from the Vietnam Living Standards Survey. Living Standards Measurement Study Working Paper No. 132

As part of the restructuring of the educational system in 1989, the Vietnamese government implemented policy changes such as promoting the establishment of "people's" and community educational institutions, permitting the establishment of private institutions and transforming public institutions into private ones. Since Vietnam has only recently moved from a centrally planned to a market economy, private schools are still relatively rare in Vietnam. This paper examines the nature of private schooling in Vietnam using data from the 1992-93 Vietnam Living Standards Survey. This paper uses data from the 1992-93 Vietnam Living Standards Survey (VLSS) to determine the nature of private schooling in Vietnam. With the restructuring of the educational system, some public institutions have been transformed into private ones, some "people's" and community educational institutions have been established, and some rare private institutions have been established. Estimates of the determinants of the choice among public, private, and semi-public schools indicate that better off households are less likely to send their children to semi-public schools but more likely to send them to private schools. Estimates of the determinants of private (household) expenditures on education show that willingness to spend on education increases as the incomes of Vietnamese household rise. No significant effect of religion or ethnicity are found, except that the Chinese have a higher level of schooling attainment and are more likely to attend private schools. Wage regressions indicate that those who attended private school receive higher wages than individuals with the same level of school attainment who attended public schools. The importance of parental education, especially mother's education, as a determinant of children's ultimate attainment is confirmed. One implication of this is that any targeting efforts, such as the provision of scholarships or vouchers, should consider using parental education to determine eligibility. Sections of the report include: (1) "Introduction"; (2) "Overview of the Education System in Vietnam"; (3) "The Current Role of Private Education in Vietnam"; (4) "An Analysis of the Prospects for, and Benefits of, Expansion of the Private Sector"; and (5) "Summary and Conclusion." The appendix offers "Determinants of School Choice, Upper Secondary Level, 1992-93." (EH)