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© 2022 International Monetary Fund
WP/22/185
IMF Working Paper
Asia- Pacific Department
Digitalization and Social Protection: Macro and Micro Lessons for Vietnam Prepared by Amr Hosny and Alexandre Sollaci*
Authorized for distribution by Era Dabla-Norris
September 2022
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
ABSTRACT: The COVID-19 shock has underscored the importance of digital tools for enhancing the effectiveness and efficiency of social protection systems. Cross-country evidence suggests that digital IDs linked with bank and/or mobile money accounts can improve the delivery of social protection programs and better reach eligible beneficiaries. Using data from the Vietnam Household Living Standard Survey, we present micro simulations on the welfare gains of digital social protection during the pandemic. While digitalization offers opportunities, potential risks would need to be carefully managed. Vietnam is advancing on individual pieces of the digitalization puzzle, including full digital IDs and mobile money, and the next step is to put these pieces together.
| JEL Classification Numbers: | C15, J65, H31, O57 |
| Keywords: | digitalization, social protection, Covid-19 |
| Author’s E-Mail Address: | AHosny@imf.org; ABalduinoSollaci@imf.org; |
| JEL Classification Numbers: | C15, J65, H31, O57 |
| Keywords: | digitalization, social protection, Covid-19 |
| Author’s E-Mail Address: | AHosny@imf.org; ABalduinoSollaci@imf.org; |
Title Page
WORKING PAPERS
Digitalization and Social Protection: Macro and Micro Lessons for Vietnam
Prepared by Amr Hosny and Alexandre Sollaci
Contents
1. Introduction
2. Identifying Beneficiaries: Cross-Country Considerations
3. Reaching Beneficiaries: Cross-Country Experiences
4. Simulating the Welfare Gains of Digital Social Protection for Households During Covid-19
References
Annex: Data and Measurements
FIGURES
Fig 1: Mobile and Internet Subscriptions
Fig 2: Mobile and Internet Prices
Fig 3: Financial Inclusion Indices
Fig 4: Coverage, Social Protection and Labor
Fig 5: Non-Take-Up and Leakage
Fig 6: Digital/Biometric IDs
Fig 7: G2P (Government Transfer Payments)
Fig 8: Mobile Money vs Financial Institutions
Fig 9: Mobile Money Outlets vs Financial
Fig 10: P2P Payments
Fig 11: P2B Payments
Fig 12: P2G Payments
Fig 13: Regulation and Mobile Money Adoption
Fig 14: Digital and Financial Access in Vietnam
Figure 15: Income Distribution and Losses Under Counterfactual Scenarios, ε = 0.5
TABLES
Table 1: Average income loss (percent, relative to 2018 baseline)
Table 2: Digital and Financial Access for Households in Vietnam
The manuscript benefited from useful comments and suggestions from Vu Chau, Era Dabla-Norris, Emine Hanedar; Jeff Kearns, Huong Lan Vu, Chris Papageorgiou, Cian Ruane and Yue Zhou.