Vietnam's Economic Boom Fuels Widening Social and Wealth Inequalities

Vietnam’s economy is demonstrating robust expansion amid a volatile global backdrop, with gross domestic product growing by an estimated 8.02 per cent in 2025. This performance pushed the nation’s economic scale to approximately $514 billion and raised GDP per capita to around $5,026. The growth trajectory continued into the new year, as first-quarter GDP for 2026 registered a 7.83 per cent year-on-year increase.

Yet this period of rapid economic development, accelerated by urbanization and digital transformation, is concurrently reshaping Vietnam’s social fabric. While the middle class has expanded and poverty has receded, stark inequalities in income, assets, skills, geographic opportunity, and social protection are becoming more pronounced, presenting fresh challenges for policy and governance.

The Contours of a Stratified Society

Data from the Vietnam Household Living Standards Survey 2024, conducted by the National Statistics Office at the Ministry of Finance, reveals significant income disparities. The average monthly income per capita reached VND5.4 million ($208), a 9.1 per cent increase from 2023. However, this national average masks a deep urban-rural divide: urban residents earned an average of VND6.9 million ($265) per month, over 1.5 times the VND4.5 million ($173) recorded in rural areas. Regional disparities are also sharp, with the Southeast region posting the highest average income at nearly VND7.1 million ($273) per person per month, while the Northern Midlands and Mountainous Region recorded the lowest at approximately VND3.8 million ($146).

While the nationwide poverty rate fell to 2.3 per cent in 2024, a decline of 1.1 percentage points from the previous year, the focus of social policy is shifting. Under a multidimensional poverty framework, deprivation in employment now constitutes 40.3 per cent of the total, followed by deficiencies in adult education at 30.7 per cent and nutrition at 21.4 per cent.

Vietnam's labor market has shown improvement, though it faces structural headwinds. In 2025, the workforce aged 15 and above numbered approximately 53.5 million people, of whom 52.4 million were employed. The average monthly income for workers rose 8.9 per cent year-on-year to VND8.4 million ($323) in 2025, climbing further to VND9 million ($346) in the first quarter of 2026. During this period, the share of workers with formal qualifications or certifications reached 29.6 per cent.

Despite these gains, youth unemployment remains a significant concern, with the rate for those aged 15 to 24 standing at 8.86 per cent, far above the overall working-age unemployment rate of 2.21 per cent. A more fundamental challenge is the prevalence of informal employment. According to the International Labour Organization’s 2026 framework, informal work accounted for 62.2 per cent of total employment in the first quarter of 2026. This figure was higher in rural areas at 71.1 per cent compared to 48.4 per cent in urban centers, leaving a large portion of the workforce without stable contracts, social insurance, or protection from economic shocks.

Against this backdrop, social stratification is evolving along five interrelated dimensions:

First, income inequality persists. Vietnam’s income Gini coefficient was 0.372 in 2024, indicating moderate inequality. However, the wealthiest 20 per cent of the population earned an average of VND11.8 million ($454) per person per month, 7.4 times higher than the VND1.6 million ($62) earned by the poorest 20 per cent. This gap affects access to education, healthcare, and housing, risking the intergenerational transmission of inequality.

Second is asset inequality. The growing importance of real estate, land, equity, and business ownership is widening social divides. Those with significant assets possess advantages distinct from younger generations who rely on wage income. If property prices continue to outpace earnings, upward mobility for youth and migrant workers could be severely constrained.

Third is geographic inequality. Disparities between urban and rural areas, and across different regions, reflect unequal access to infrastructure, jobs, and public services. Without robust regional development policies, these gaps risk becoming entrenched.

Fourth is inequality in skills and job quality. While the share of trained workers has risen to 29.6 per cent, the majority of jobs remain informal. As Vietnam transitions to a higher-value economy, skilled workers will likely see expanding opportunities, while lower-skilled workers face pressure from automation and technological disruption.

Fifth concerns access to social protection. Health insurance coverage reached an impressive 95.16 per cent in 2025, but social insurance covered only 45.1 per cent of the workforce, or 21.53 million people. As Vietnam’s population ages—the World Bank projects it could become an aged society by 2035—the gap between those with pensions and those without adequate protection will become more acute.

Vietnam's Five Emerging Social Strata

Based on these patterns, Vietnam’s social structure can be categorized into five broad groups:

1. The Wealthy and Ultra-Wealthy: This elite group derives its status primarily from asset ownership, including major business holdings, real estate, equities, and other financial assets. They have been the principal beneficiaries of economic growth, urbanization, and financial market development, with wealth generated through capital and investment rather than labor.

2. The Upper Middle Class: Comprising professionals, managers, senior officials, and highly-skilled workers in sectors like technology, finance, and professional services. While enjoying comfortable incomes and the ability to invest in their families' future, they face mounting pressure from rising living costs and intense professional competition.

3. The Mainstream and Lower Middle Class: This large cohort includes civil servants, office staff, skilled laborers, and small business owners. They are crucial drivers of domestic consumption and social stability but have limited accumulated wealth, leaving them vulnerable to job loss, illness, and other income shocks.

4. Industrial and Informal Workers: This group includes factory, construction, transport, and gig economy workers. They are significant contributors to economic activity but typically face low wages, job instability, and limited access to social safety nets, exposing them to economic downturns and inflation.

5. The Poor and Vulnerable: This stratum encompasses ethnic minorities, residents of remote areas, small-scale farmers, and others facing multidimensional deprivation. Despite national progress in poverty reduction, they continue to lack access to stable employment, quality education, healthcare, and markets.

Five Trends Shaping the Future Social Landscape

Vietnam’s social structure is poised for five transformative shifts driven by continued growth, digitalization, and global integration:

First, the middle class is set to expand further with the growth of the service and digital economies. However, escalating costs for healthcare, education, and housing could create a large segment of a “vulnerable middle class.”

Second, wealth inequality may become the most significant axis of social stratification. The gap between asset owners and wage-dependent workers, particularly younger generations, could widen if housing prices continue to escalate.

Third, skills-based differentiation will accelerate. The rise of AI, automation, and the green economy will divide society not just by wealth, but by the capacity to adapt and reskill for new labor market demands.

Fourth, population aging will create a new social cleavage. A growing divide is expected between retirees with pensions and assets and those who worked in the informal sector and now face poverty in old age.

Fifth, climate change threatens to deepen regional disparities. The World Bank estimates that climate-related events could reduce GDP by 12 to 14.5 per cent annually by 2050 and push up to 1 million people into extreme poverty by 2030, with farmers, fishermen, and informal workers most at risk.

Implications for Governance and Social Stability

While shifts in social structure are a natural outcome of economic development, unmanaged stratification can transform differences into unequal opportunities, posing significant challenges to governance.

Key risks include mounting pressure on social equity and public trust; rising demands for interest representation; distortion of resource allocation by vested interests; increased strain on urban management and public services; and the potential erosion of social cohesion if inequality becomes entrenched across generations.

To navigate these challenges, policymakers must transition from a traditional focus on poverty alleviation to a broader framework centered on expanding opportunity for all citizens in education, employment, housing, and social protection.

Six strategic priorities emerge:

1. Make reducing inequality of opportunity the central objective of social policy.
2. Address wealth disparities through transparent housing and land management.
3. Prioritize skills development and job quality as the fundamental long-term solution.
4. Expand social insurance and protection coverage to informal sector workers.
5. Foster more transparent, responsive, and data-driven social governance.
6. Integrate climate justice and equitable transition principles into regional development and climate adaptation strategies.

(*) Associate Professor Phung The Dong is from the Ministry of Finance.