UNIVERSITY OF ECONOMICS ERASMUS UNVERSITY ROTTERDAM HO CHI MINH CITY INSTITUTE OF SOCIAL STUDIES VIETNAM THE NETHERLANDS VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS AN EXPLANATION FOR VIETNAM’S RECENT MIGRATION PATTERN BASED ON CUMULATIVE CAUSATION THEORY AND RELATIVE DEPRIVATION THEORY BY Vu Thu Ha MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, DECEMBER 2017 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS AN EXPLANATION FOR VIETNAM’S RECENT MIGRATION PATTERN BASED ON CUMULATIVE CAUSATION THEORY AND RELATIVE DEPRIVATION THEORY A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By Vu Thu Ha Academic Supervisor: Prof. Nguyen Trong Hoai HO CHI MINH CITY, DECEMBER 2017 TIEU LUAN MOI download : skknchat@gmail.com DECLARATION I hereby declare that this thesis paper entitled “An explanation for Vietnam’s recent migration pattern based on cumulative causation theory and relative deprivation theory” has been written by me, representing the result of my own work, in compliance with the guidelines and disciplines of Vietnam Netherlands Programme. The contribution of my supervisor and collaboration with others, specified in the acknowledgement, to fulfill this research are consistent with normal supervisory practice. This dissertation, or any substantial part of this dissertation, has not been submitted for any previous qualifications or any other institutions.
Date: 01 December 2017 Signature: _______________ Full name: Vu Thu Ha i TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENT It is impossible for me to finish my thesis without the guidance from my supervisor, Prof. Nguyen Trong Hoai, knowledges provided by Vietnam Netherlands Programme, help from my classmates and supports from my family. First and foremost, I would like to send my special thanks to my supervisor, Prof. Nguyen Trong Hoai, who is always ready to steer me to the right direction, to give me useful advices when I have trouble with my research and to motivate me to explore my ability.
I am so grateful for all of his dedication and devoted attention in every single step in my journey of conducting this research. Having a chance to work with him is really an unforgettable experience in my life. I would also like to thank Dr. Pham Khanh Nam, Dr.
Truong Dang Thuy and all other lectures and mentors from Vietnam Netherlands Programme for their valuable lessons, guidance and knowledge that they shared to me throughout the program. I appreciate all of wonderful experience and fantastic friends in class VNP22 that I’m luckily obtained thanks to attaining this course. Last but not least, I must express my profound gratitude to my family for providing me unconditional supports and unceasing encouragement that I can pursue my learning desire. From bottom of my heart, I want to say thank you all.
ii TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT This paper combines cumulative causation theory and relative deprivation theory to explain incentives and influences on decision to send migrants of a household, concerning interaction of the household’s characteristics, especially factors related to income, and the features of the origin community. Two subsets of data from two successive Vietnam Household Living Standards Surveys (VHLSS) in period from 2010 to 2014 are established and employed to avoid endogeneity in the analysis of migration pattern in Vietnam in 2012 and 2014. By using logit method and combination of difference-in-difference (DID) and propensity matching score method (PSM), we find some interesting results that have never been found in previous empirical studies for Vietnam case. First, the competitiveness competence level of the origin province may reduce possibility of work migrants.
Furthermore, relative income status before migration event, represented by ratio of income per capita of a household over the average income per capita in the origin province, may positively affect the possibility of sending migrants of the household. Then, returns from migration, could create a significantly positive effect on the relative income status of the household at the origin via remittance channel, generating an automatic mechanism in migration progress as expected in the cumulative causation theory. Keywords: migration, cumulative causation theory, relative deprivation, remittance, relative income, PCI JEL classification: O15, F24, D31 iii TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS I.4 Data and methods .1 Migration theory reviews.2 Relative deprivation theory .3 Remittance – the link between the migrants and their origin .2 Main applicable concepts .3 Stage one: examining determinants of migration .4 Stage two: testing effects of migration. RESULTS AND DISCUSSION .1 Determinants for migration in Vietnam in 2012 and 2014 .2 Impacts of migration on income and expenditure in Vietnam in 2012 and 2014 .3 Limitation of the study.
68 Annex 1: Descriptive statistics of explanatories in year 2010. 68 Annex 2: Descriptive statistics of explanatories in year 2012. 71 iv TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 1: A general framework of migration decision making. 10 Figure 2: The conceptual framework for the migration pattern in relation with the relative income status of a household and the origin community.
21 Figure 3: Difference-in-Difference estimation, graphical explanation. 33 v TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 1: Logit regressions of determinants of migration in period 2010-2012. 36 Table 2: Logit regressions of determinants of migration in period 2012 -2014. 42 Table 3: Impact of migration on income and expenditure in 2012.
52 Table 4: Impact of migration on income and expenditure in 2014. 55 vi TIEU LUAN MOI download : skknchat@gmail.com ABBREVIATION DID Difference-in-Difference PCI Provincial Competitive Index PSM Propensity Matching Score US or USA The United States of America VHLSS Vietnam Household Living Standards Survey VMS Vietnam Migration Survey VNDHS Viet Nam Demographic and Health Survey VNMHS Viet Nam Migration and Health Survey WTO World Trade Organization vii TIEU LUAN MOI download : skknchat@gmail.1 Problem statement According to Migration Policy Institute (MPI), an independent, non-partisan, non-profit think tank of specialists and analysts on migration field, the year 2016 is a remarkable one for the migration worldwide. Notably, the upheavals in the political and economic situation of powerful nations and affiliates lead to a dramatic crisis in movement of capital and labor around the world. For example, the European migrant crisis began in 2015 with significantly increase of immigrants and refugees arrived in the European Union.
As stated by The New York Times, there are over 123,000 migrants landed in Greece in the two first months of 2016, which is more than twenty times greater in comparison with the same period of 2015. This fact challenges authorizes and policy-makers in the European Union to take prompt actions and provide relevant policy to better manage immigration issues and protect the living standard of native people. In the United States of America, one of the most powerful country in the world, the new president, Donald Trump, takes office, pledging a fasten immigration policy in the US that including a crackdown on illegal immigration, construction of border walls, reductions in refugee and immigrant admissions, and greater screening of newcomers. All of these facts and actions in the last recent years illustrate for the increasing importance meaning of migration problem in association with the socio-economic situation.
The report of the World Trade Organization (WTO, 2008) notices the first explosion of migration happened in the 1950s as the consequence of the World Wars, then gradually increasing before booming in the latter half of the 20th century. Castles, De Haas, and Miller (2013) describe the general patterns of International population movements in the modern world as globalization of migration relating to the diversification of sending countries and the spread in spectrums of economic, social and cultural background; having changes in the direction of dominant 1 TIEU LUAN MOI download : skknchat@gmail.com migration flows overtime; and growing the politicization of migration with more and more intervention from the politics relationships. As migration becomes an increasing importance factor in the development process, investigation on the incentives and influences of migration to human beings is necessary. Many researchers are attracted to find its characteristics, origin, mechanism and impacts (Harris & Todaro, 1970; Katz & Stark, 1986; Lee, 1966; Lewis, 1954; Ranis & Fei, 1961; Ravenstein, 1889; Sjaastad, 1962; Stark, 1984, 1991; Stark & Levhari, 1982; Stark & Taylor, 1989; L.
Generally, there are three main schools of theory on migration, called macro- level, micro-level and meso-level regarding different perspectives of views (Hagen‐Zanker, 2008). A lot of empirical studies on determinants and effects of migration has been conducted, especially regarding patterns in the two biggest countries in the world including the USA (Douglas S Massey et al., 1993; Stark & Taylor, 1989) and China (Sicular, Ximing, Gustafsson, & Shi, 2007; Zang, 1998; Zhao, 1999; Zhu, 2002). Although each school of theory has specific perspective of views on migration, their common objectives are revealing the determinants and effects of this phenomenon. While classical theories generally concentrate on the economic viewpoint, the modern theories expand the scope of research to other social aspects, including networks, migration institutions and relative deprivation (Hagen‐Zanker, 2008).
In Vietnam, the flows of migration have been dramatically increased through times, especially since the country became independence and adopted renovation policies in the 1980s. As reported in The World Bank data from 1960 to 2015, the number of Vietnamese people migrated internationally in 1975 was about 4,661 individuals, starting to rocket nearly ten times in 1980, reducing slightly in the late of the 80s before rising rapidly to reach the volume of 72,793 international migrants in 2015. Interestingly, in terms of fraction of international migration in the total population, the World Bank data presents the migration pattern in Vietnam having nearly similar upward trend as in China; but, at higher level of about 0.03 2 TIEU LUAN MOI download : skknchat@gmail.com percentage points. These facts suggest for rousingly remarkable influences of international migration to the socio-economic circumstance in Vietnam.
Apart from international migration, the phenomenon of internal migration in Vietnam in recent years is also noticeable. According to Vietnam Labor and Employment Survey conducted by the General Statistics Office of Vietnam (GSO), the amount of internal migrants aged 15 and over has exceeded 1 million in 2015 and 2016, about 1.5% of the population respectively, much higher than the volume in the previous period 2012 - 2014 with approximately 832 thousands people aged 15 and over changed their place of residence or 1.2% of the whole population.2 Research questions Despite of description by the World Bank as a dynamic country in East Asia region with strong economic growth, remarkable mitigation of poverty and other achievements in social improvements, Vietnam is facing with variety of difficulties and challenges of an emerging country, especially fragility of poverty alleviation and limitations in labor productivity. Apart from application of advanced production models in different scales, the facts and figures on rising of migrants in all over Vietnam suggest that migration has been selected by the authorities, many people and households with the expectation of enhancing their income and living standards. In the 1970s and 1980s, with the aims of exploring new opportunities of cultivation and reallocating population across the country, Vietnamese government carried out migration policies to send a remarkable number of Red River Delta inhabitants up to Northern areas or downward to the Mekong River Delta and Central Highlands, generating motivation for movement wave in Vietnam (Cu, 2005).
Cu (2005) indicates that the government-planned migration not only brings many noticeable enhancement for migrants and their family in terms of employment, income and housing but also creates remarkable changing in economic 3 TIEU LUAN MOI download : skknchat@gmail.com structure in local and entire of Vietnam. As a consequence, attraction of fruitful outcomes from migration encourages other residents to participate into this trend, creating internal migration boom in many provinces in Vietnam.