Upward Mobility and the Role of Government Performance

Abstract

Research on upward mobility often emphasizes individual or household characteristics such as education, occupation, or family background, with limited attention to how the broader living environment shapes mobility prospects. This paper addresses that gap by examining the role of government performance on upward mobility in Vietnam, a country marked by rapid growth but facing income and regional inequality. Using panel data from the Vietnam Household Living Standard Surveys (2012–2018) combined with the Provincial Governance and Public Administration Performance Index (PAPI), we apply a generalized ordered logit model to assess both perceived and income-based mobility. The findings show that improvements in governance raise the likelihood of households moving upward. Civic participation and control of corruption mainly enhance perceived mobility, while better public service delivery supports income mobility. These effects are heterogeneous: rural households, the majority ethnic group, low-income families, and northern residents benefit clearly, while urban households, minorities, and southern residents are less benefited. The results suggest that strengthening local governance is a critical policy lever for fostering the upward mobility of citizens.