Is the emerging non‐farm market economy the route out of poverty in Vietnam?

Are the household characteristics that are good for the transition to a more diversified market‐oriented economy in Vietnam also important for reducing poverty? Or are there trade‐offs? The determinants of both poverty incidence and participation in rural off‐farm activities are modeled as functions of household and community characteristics using comprehensive national household surveys for 1993 and 1998. While there are some common causative factors, such as education and region of residence, the processes determining poverty and inhibiting diversification are clearly not the same. Participation in the emerging rural non‐farm market economy will be the route out of poverty for some, but certainly not all, of Vietnam's poor.