URBAN–RURAL DIFFERENCES IN RETIREMENT PREPAREDNESS: UNPACKING THE PLANNING–RESOURCES PARADOX IN VIETNAM

Abstract

Purpose: Vietnam’s rapid population aging raises pressing questions about household readiness for retirement. This study investigates the extent and sources of rural–urban differences in retirement preparedness, focusing on both behavioral and resource-based dimensions.

Methodology: Using nationally representative data, we analyze two indicators of preparedness: a retirement-planning dedication index and the logarithm of financial assets. Sequential regression models and Blinder–Oaxaca decompositions are employed to separate rural–urban gaps into endowment and coefficient components. Robustness checks include ordered-logit models for planning and an inverse hyperbolic sine wealth-to-income measure for assets.

Results: Urban households hold more financial assets in unconditional comparisons, but this advantage is fully explained by endowment differences and disappears once controls are included. In contrast, rural households exhibit higher planning dedication after accounting for covariates. Decomposition results attribute this rural planning premium primarily to coeffi cient and interaction effects, suggesting stronger behavioral returns to similar traits in rural settings.

Conclusion: Asset disparities largely reflect compositional differences, while planning gaps stem from behavioral factors. These findings highlight the need for complementary policies that enhance both endowments and behavioral capacities to strengthen retirement preparedness across regions.