}JJJ} f;,B : Australian Government ~\ WORLD BANK GROUP ~ Department of Foreign Affairs and Trade t:::::/::Y Morch 2021 Monitoring COVI D-19 lmpBcts on Households in Vietn8m Rounds 3 and 4 data snapshot INTRODU CTI ON To monitor the social and economic effects on households during the COVID-19 pandemic, the World Banh. is conducting High-Frequency Phone Surveys of Households in Vietnam. These monitoring data help generate insights on household well-being amidst this dynamic period , and highlight the effects on the most vulnerable members of Vietnamese society. The third round of the of the World Banh. COVID-19 household monitoring survey in Vietnam was conducted in September 2020, shortly following the emergence of the Danang outbreak The fourth round in Vietnam was conducted in the first weeks of 2021, before the outbreak in Hai Duong that led to loch.downs and travel restrictions scattered across the country Thus, timing of data collection will affect results on perceptions and income changes in January . This snapshot offers a summary of trends for selected indicators from Round 3 (R3) and Round 4 (R4) New questions were added in Round 4 on digital behavior, vaccines, and impacts on future plans. HIGHLIGHTS - ROUNDS 3 and 4 In 2021, households are still worried about the threat of COVID-19 to household finances Perceptions on COVID-19 management is more positive than perceptions on relief response. Household income in January 2021 is 11-22 percent lower than levels in June 2020 (based on high and low impact estimates) . Recovery in household income is uneven - incomes for households in the lowest quintile are still declining, while stab ilizing in other quintiles . 46 percent of households reported lower income in January 2021 compared to the same time last year Longer term impacts - households with lower incomes are deferring their plans such as making large purchases or investments. Digital acceleration - about 10 percent of respondents are new online shoppers, shopping for products online for the first time after February 2020. The vast majority of the population agree to be vaccinated for COVID-19 (under a no-cost option) When asked to identify priority groups to receive the vaccine first, seniors and children were top choices, followed by health care workers & medical professionals @woRLD BANK GROUP Equitable Growth, Finance and lnst1tut1ons, Poverty & Equity Global Practice, East Asta & Pac1f1c Region Monitoring COVID-19 Impacts on NOTE NO. 3 Households in Vietnam March 2021 PERCE PTIONS IN 2021, HOUSEHOLDS ARE STILL WORRIED ABOUT THE THREAT OF COVID- 19 TO HOUSEHOLD FINANCES. --- Almost the same percentage of households considered COVID-19 to be a substantial threat to household finances in January 2021 as in September 2020 (Figure 1) Households with a family business have higher rates of feeling financially at-rish.. Fieldworh. in September followed the Danang outbreak which may have led to heightened fears. Fieldworh. in January 2021 was conducted before the large outbreah. in Hai Duong and other areas , but perceptions and concerns of impacts could have been impacted by the previous occurrences of local transmission in December 1, 2020. Figure 1. How much of a threat would you say the coronavirus outbreak is to your household's finances? 60 50 40 ■ Subst antia l th reat ■ A moderate th reat 30 ■ Not m uch of a th reat 20 No t a threat at a ll 10 0 Septem ber 2020 Jan uary 2021 Source: World Bank Vietna m COV lD-19 household s urveys (R3, R4) PERCEPTIONS ON COVID- 19 MANAGEMENT RESPONSE IS MORE POSITIVE THAN PERCEPTIONS ON RELIEF RESPONSE Virtually all households are satisfied with the government response on COVID-19 mBnBgement, but to a lesser extent on the effectiveness of supporting households In the area of relief, questions were posed on food affordability, support to those who lost employment, and the effectiveness of relief programs. On the management side, questions were ash.ed about the perception of border control, and responses to various outbreah.s. While there was near universal satisfaction with government responses to managing outbreah.s and the border, there was less satisfaction that the 62 trillion relief program reached the poorest households (Figure 2). Results from earlier rounds of the WB COVID-19 household surveys also noted that very few households received benefits from newly proposed relief programs targeted to those that were negatively impacted by COVID-19 (Yang et al 2020; World Banh., 2020). 2 @woRLD BANK GROUP Equitable Growth, Finance and lnst1tut1ons, Poverty & Equity Global Practice, East Asta & Pac1f1c Region Monitoring COVID-19 Impacts on NOTE NO. 3 Households in Vietnam March 2021 ~ Food is easily accessib le and affordab le ~ ~ Eno ugh is being done to help t hose who have lost t heir jo bs or o had to close their business > 0 u The 62 tr illion program re ached the most in need ~ C Q) April lockdownwas a corre ct length E Q) OJ) Cl C Border control of immigrant s Cl E ~ Response to Danang outbre ak 0 > 0 Response du ring Marc h/ April crisis u 0% 20% 40% 60% 80% 100% %of respondents agree or are satisfi ed Notes. For interpretation purposes. it is important to note t hat perceptions can change very quickly depending on t he t iming of the survey. and sho uld be interpreted with caution. For example. fiel dwork for Round 3 occ urred du ring the entire mon th of September 2020 and the sha re of respondents that did not feel comforta ble traveling interna lly ra nged fro m nearly 30 percent in week 1 nea r the Danang outb reak. to 10 percent by the end of the month. Source: Wor ld Ban k Vietnam COV ID-19 ho usehold surveys (R3) HOUSE HOLD HOUSEHOLD INCOM E IN JANUARY 20 21 IS ABOUT 11 -22 PERC ENT LOWER THAN LEVELS IN COME IN JUN E 20 20 . Nearly a year has passed since the onset of COVID-'19, and uneven distributional economic impacts are emerging Most households are recovering, but not all at the same pace. Income recovery rates are lower among households who were at the lower end of the income distribution pre-COVID. women, and ethnic minorities. These results show that despite the remarkable resilience of the Vietnamese economy and society, there are still challenges in equity towards full recovery. The possibility of widening inequality is relevant An index of household income was created indexing household income to '100 in June 2020, when the first round of the World Banh. household COVID- '19 monitoring surveys was conducted By January 202'1, average household income was estimated to be '1'1-22 percent lower than in June 2020 (Figure 3). The sharpest decline was recorded between the first and second rounds of the monitoring surveys, and has since stabilized for most but not all. Figure 3. Household income in January 2021 is about 11 -22 percent lower than levels in June 2020 100 Q) C ::, --, Low impact 0" 90 g X Q) -co c - 80 ·- 0 Q) 0J ED High impact 0 0J u 70 .<=: 72 0 _c i,: 60 ::, 0 :r 50 Jun/Jul 2020 Jul/A ug 2020 Sept ember 2020 Jan uary 2021 Notes Low and high estimat es are prov ided since exac t rates of income change is not recorded. on ly ranges (< 25%. 25-49%. 50-99%. and 0 100%). High- impact estimates ass ume t he highest percen t change in a record ed range. Low- im pact estimates assume t o lowest percen t change in a range Assumptions are also made t hat income levels remained constan t between Septem ber 2020 and Jan uary 202 1. Source: World Ban k Vietnam COV ID-19 househo ld surveys (R1, R2, R3 . R4) 3 @woRLD BANK GROUP Equitable Growth, Finance and lnst1tut1ons, Poverty & Equity Global Practice, East Asta & Pac1f1c Region Monitoring COVID-19 Impacts on NOTE NO. 3 Households in Vietnam March 2021 RECOVERY IN HOUSEHOLD INCOME IS UNEVEN - INCOMES FOR HOUSEHOLDS IN THE LOWEST QUINTILE ARE STILL DECLINING. WHILE STABILIZING IN THE REST Income recovery trends vary by household groups, in particular when comparing households based on their pre-COVID income quintiles in 2018. Under high- and low-impact estimates, households across the distribution followed similar rates of income decline through September 2020 . However, households in Q2-Q5 enjoyed relative income stability between September 2020 and January 2021, while income among households in the lowest quintile were more negatively affected during this period By January 2021, average household income of the top quintile was about 1t4-2t6 percent less than levels in June 2020. On the other hand, households in the lowest quintile experienced continuous income reduction in each successive survey round, with income in January 2021 estimated to have declined between 14-25 percent since June 2020 . Fi ure 4. Households with lower income before the onset of COVID-19 are ex eriencin a slower income recovery High -impact estimate Low -impact estimate 100 100 0 0 0J 0J 0 0 0J 95 0J 95 Q) Q) C C :::, :::, ' " 90 0 '0" 90 g g X X Q) Q) 'D 85 'D 85 .!::: .!::: Q) Q) E 0 E 0 u 80 u 80 ,; .!::: 'D 'D 0 0 .c .L Q) Cf> 75 i,: 75 :::, :::, 0 0 :r: :r: 70 70 Jun /Jul J ul/A ug September January Jun /J ul Jul /A ug September Jan uary 2020 2020 2020 2021 2020 202 0 2020 2021 - - - Lowest quint ile(Q1) - Q2 - Q3 - Q4 - Topquint ile(Q5) Notes Field wor k was cond ucted over the fo llow ing periods: Ro und 1 J une 5 - July 8. 2020. Ro und 2 July 27 - Aug. 12. 2020. Ro und 3 Sept 9 - Oct 1. 2020. and Ro und 4 Jan uary 2-15.2021. Household qu int iles are based on househo ld consumpt ion per capita in 2018 Source World Ban k Vietnam COV lD-19 house ho ld surveys (R1. R2. R3 . R4) 46 PERCENT OF HOUSEHOLDS STILL HAVE LOWER INCOME IN JANUARY 2021 THAN AT THE SAME TIME LAST YEAR. The cumulative incidence of income reduction since the beginning of the pandemic is larger since the household income index is constructed beginning only in June 2020. When examining year on year changes in household income, almost half report lower income in January 2021 compared to January 2020 . The good news is that over time, the share of households suffering large yoy declines in household income of 50-99 percent is shrinh.ing. About 24 percent of households reported that incomes in July 2020 was 50-99 percent lower than at the same time a year ago By January 2021, only 16 percent of households reported income levels were 50-99 percent lower than the same time last year (Figure 6) 4 @woRLD BANK GROUP Equitable Growth, Finance and lnst1tut1ons, Poverty & Equity Global Practice, East Asta & Pac1f1c Region Monitoring COVID-19 Impacts on NOTE NO. 3 Households in Vietnam March 2021 Figure 5. Yoy Income changes show that nearly half of Figure 6. Among households with a yoy decline. the households still have lower income in January 2021 average amount of income reduction has lessened than the same time last ear ■ Increase Same Decrease ■ D/ K. ■ 1 >=100% ■ 2. 50 -99% ■3 25-49% 100% 90% 80% - 100% 90% 4 < 25% Don 't K.now 80% if> 70% {l 70% 32 0 0 ii if> 60% i ::l 60% ::l i 50% _g 50% 4- 0 l1' 40% l1' 40% al al .c .c Ul 30% Ul 30% --- 20% 20% 10% 10% 0% 0% Jul/Aug 2020 Sept ember 2020 January 2021 Jul/A ug 2020 September Jan uary 202 1 2020 Notes. Dates shown are f ield work dates. Questions on income dynamics refer to changes fro m either the [the same t ime last year] or [previous month] fro m the date of interview Source: World Bank Vietnam COV ID- 19 househo ld surveys (R1. R2, R3, R4) For most households. these declines in income were absorbed through various coping strategies The most common coping strategy was the reduction of consumption. many also borrowed from family /friends or did nothing at all. Very few households cited their coping strategies included engaging in new income generation activities. Existing household savings and strong family support networks may be helping households cushion the blow to their income sources. However. there is uncertainty as to how much longer households will be able to manage with lower incomes. EMPLOYMENT HOUSEHOLDS ARE ECONOMICALLY ACTIVE. BUT LABOR INCOMES ARE STILL DEPRESSED ACTIVITIES In the early months of the pandemic. over 40 percent of households in the bottom 40 percent of the income distribution experienced employment loss (Figure 7) Wealthier households were more likely to experience reductions in wages and salary rather than job joss. By the second half of 2020. these negative employment impacts dissipated significantly. However. as seen from the earlier section on household income trends. on average households have not yet fully recovered to pre- COVI D income levels. 5 @woRLD BANK GROUP Equitable Growth. Finance and lnst1tut1ons. Poverty & Equity Global Practice. East Asta & Pac1f1c Region Monitoring COVID-19 Impacts on NOTE NO. 3 Households in Vietnam March 2021 Fi ure 7. Fewer households are ex eriencin em lo ment loss and wa e declines Job loss Reduction in wages or salary - Bottom Q1 - Q2 Q3 Q4 Top 20 - Bottom Q1 - Q2 Q3 Q4 Top20 80 - 70 - ] 60- .Q 0 ] 50- '-' C: .* c. >< 40- " ~ 30- "' I ~ 20- 10 - o- Notes: Dat es shown a re reference periods. In t he firs t ro und, t he reference period for q uestions on employment loss and wage decl ines referenced [Since February 2020]. thus t he reference period is shown as "Fe b - J une 2020" In subseq uent rounds, q uestions refer t o the [prev ious month] from t he date of inte rview Househo ld q ui ntiles a re based on ho usehold cons ump tion per capita in 2018. Source: Wo rld Bank Vie t nam COV ID-19 ho useho ld s ur veys (R1, R2. R3 . R4) In the case of family businesses. economic impacts were more severe along the intensive margin rather than the extensive margin (Figure 8). Family business closure rates remained low throughout 2020 . By the second half of the year, most family businesses were open. While most businesses remained open, a larger proportion experienced reductions in family business income. Wealthier households are more likely to have operations in family businesses. thus impacts along this economic channel is more salient at higher ends of the distribution. Fi ure 8. Reduced famil business income was more common than famil business closures Business closure Reduction in family business income - Bottom Q1 - Q2 Q3 Q4 Top 20 - Bottom Q1 - Q2 Q3 Q4 Top 20 80 - 80 - " E 8 70 - ~ 70 - .!: 0 c; "' "' ~ 60 - ii 60- 'in " 'in .E .,E 50 - 5§ 50 - I I ] 40 - c: -~ ~ 30- " ~ 20- I"' I ;;e 10- 0- Notes: Dat es shown a re reference periods. In t he firs t ro und, t he reference period for q uestions on bus iness clos ure and fam ily bus iness income referenced [Since Februa ry 2020], t hus t he reference period is shown as "Fe b - J une 2020". In s ub seq uen t rounds . questions refe r to the [previous mon t h] from t he date of inte rview. Ho usehold q ui ntiles a re based on ho useho ld cons um pt ion per capita in 2018. Source: Wo rld Bank Vie tnam COV ID-19 ho useho ld s ur veys (R1, R2, R3, R4) 6 @woRLD BANK GROUP Equitable Growth, Finance and lnst1tut1ons, Poverty & Equity Global Practice, East Asta & Pac1f1c Region Monitoring COVID-19 Impacts on NOTE NO. 3 Households in Vietnam March 2021 In 2020, agricultural production among households with family farms were also affected by environmental hazards and crop disease, in addition to declines in the price of farming output These negative impacts were more commonly occurring among households in the bottom 20 percent of the income distribution, who are the most active in agriculture (Figure 9). Figure 9. Declines in income due to farming related factors were more common among the poor - Bottom 0 1 - 02 03 04 Top 20 80 - 70 - E 50 - _g "' ] 40 - " E 0 _po- I"' ~ 20 - 10 - 0- Fel>-Jun 2020 Jun-J WJ~~2nc/~~~~9 202IDec 2020 - Jan 2021 Notes Da t es shown are reference periods. In the first ro und. the refere nce period fo r questions on fam ily farm income refere nced [Since February 2020]. thus t he reference period is shown as "Feb - J une 2020' In s ubseq uent ro unds. q uestions refer t o the [prev ious month] fro m t he date of interview . Househo ld quintiles are based on household cons umption per cap ita in 2018 Source: World Ban k Vietnam COV ID-19 ho useho ld surveys (R1, R2. R3 . R4) LONGER TERM IMPACTS - HOUSEHOLDS WITH LOWER INCOMES ARE DEFERRING PLANS FOR THE FUTURE For households whose income in January 2021 was still lower than in the previous year, additional questions were posed if income reductions affected any future plans. About 36 percent in this group said their plans for the future are impacted in a negative way Adaptation measures include delaying purchases of vehicles, land, apartments, or mah.ing investments in education and new businesses (Figure 10) Affected households are found along the entire income distribution. Fi ure 10. Households with lower incomes are dela in urchases and investments 100 tu 90 3 0 ~ - .c "' -. 70 3 ~ Cf> E3iQ 60 C C