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 DETERMINANTS OF SECONDARY SCHOOL DROPOUT IN VIETNAM: A PANEL DATA EVIDENCE BY LE ANH KHANG MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, JULY 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.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 DETERMINANTS OF SECONDARY SCHOOL DROPOUT IN VIETNAM: A PANEL DATA EVIDENCE A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By LE ANH KHANG Academic Supervisor: Dr. LE VAN CHON HO CHI MINH CITY, JULY 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT Joining classes of quantitative research project with STATA & VHLSS2008, hold by the Faculty of Development Economics of HCMC University of Economics and the applied econometrics seminar by Prof. Ardeshir Sepehri from University of Manitoba, Canada, have encouraged and yielded me confident to move this paper ahead. I would like to express my thanks to Mr.
Phung Thanh Binh, Mr. Truong Thanh Vu, Mr. Nguyen Khanh Duy, Ms. Ngo Hoang Thao Trang, and Mr.
Dang Dinh Thang and all other people participated for arranging and conducting the quantitative research project with STATA & VHLSS2008. I would like to express my appreciation to Dr. Nguyen Hoang Bao who introduced the logistic regression model in explaining school dropout behavior at a “sharing experience in doing research” seminar on August, 2010, hold by the Faculty of Development Economics of HCMC University of Economics. I would like to express my gratitude to Prof.
Ardeshir Sepehri who has sparked the idea of analyzing VHLSS dataset by panel data methods to capture the unobserved heterogeneity. I would like to express my sincere thanks to Dr. Le Van Chon, my supervisor, who provides me directive suggestions during the thesis performing. I would like to thank all professors in the teaching board of MDE program, who have helped me accumulate valuable knowledge to acquire this study.
To all my friends in MDE class 16, who give me emotional encouragements, I would like to express my thanks. Finally, I would like to express my deeply appreciation to my parents, to my wife and my son, to my family for spiritual supports. In particular, I dedicate this thesis to my father. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT This paper investigates the socioeconomic determinants of dropout behavior of Vietnamese children in secondary schools using the Vietnam Household Living Standard Survey for 2006 and 2008 and logistic regression model for Panel data.
Determinants are considered at individual, household, schooling, and regional levels. My findings reveal that the unobserved individual characteristics account for 17% in propensity of dropping out of secondary schools in different years 2006 and 2008. Furthermore, the results disclose that child gender, child age, child ethnic, child inactive days, household expenditure, household head gender, household head education, the number of children between 1 and 17 years old, cost of school, urban- rural, and regions have statistically significant relationship with secondary school dropout. Key Words: secondary school dropout; panel; logistic model; random effects; Vietnam 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS CHAPTER 1:INTRODUCTION.
6 CHAPTER 2:LITERATURE REVIEW .1 A standard model of household schooling investment decision .2 Empirical studies of school dropout in the world .3 Empirical Studies of school dropout in Vietnam. 12 CHAPTER 3:VIETNAMESE SECONDARY EDUCATION – AN OVERVIEW15 CHAPTER 4:RESEARCH METHODOLOGY. 22 CHAPTER 5:THE RESULTS .2 Dropout rates and Children characteristics .1 Dropout rates and Household characteristics .2 Dropout rate and School characteristics .3 Dropout rates and Regional characteristics. 52 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 4.1: Description of the variables .2: Regression results of the Random-effects models .3: The estimation of dropout probability, given initial probalibity P0.
38 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 3.1: Secondary school dropout rates .2: Gross enrollment rate by urban-rural .3: Gross enrollment rate by gender .4: Gross enrollment rate by region .5: Average expense on secondary education per schooling person in the past 12 months by urban-rural.6: Average expense on secondary education per schooling person in the past 12 months by gender .7: Average expense on secondary education per schooling person in the past 12 months by gender .8: Average expense on secondary education per schooling person in the past 12 months by income quintile.1: Dropout rate and child age .2: Dropout rate and household expenditure quintile .3: Dropout rate and years of schooling of household head .4: Dropout rate and number of children between 1 and 17 years old.5: Dropout rate and cost of school .6: Dropout rate and region. 36 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF ABBREVIATIONS GSO: General Statistics Office HH: Household LMP: Linear Probability Model MOET: Ministry of Education and Training MP: Maximum Likelihood NA: Not Applicable OR: Odds Ratio RE: Random-effects VHLSS: Vietnam Household Living Standard Survey 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1: INTRODUCTION During the past two decades, Vietnam has achieved important results in education in terms of increased enrollment, improved school infrastructure and diversified schooling forms (MOET, 2006). However, Vietnam is still facing critics on the quality of education and struggling with the phenomenon of dropping out of school. The net enrollment rates1 were 95.5% at primary level, 82.6% at lower secondary, and 56.7% at upper secondary level (GSO, 2011).
The effects of school dropout are expounded in the costs of individual, community, and society. Specifically, individual faces risk in finding jobs; country struggles low-skilled labor force; and society expands rich and poor gap. These effects have raised concerns to many researchers around the world in examining factors affect school dropout, and from that appropriate policies are proposed to policy makers to find ways to mitigate the phenomenon. There are many factors which could influence early dropping out of school.
Empirical studies point out four groups of influential factors: individual characteristics, household characteristics, school characteristics, and regional characteristics. However, most of the empirical studies in Vietnam utilized the cross-sectional data to examine the effects of these factors on the dropout behavior (Behrman & Knowles, 1999; Vo Thanh Son et al., 2001; Vo Tri Thanh & Trinh Quang Long, 2005; Nguyen Linh Phuong, 2006). Cross-sectional data face the possible problem of heteroskedasticity, specifically the unobserved individual effects. Panel data are advocated to control for this.
By addressing above issues, in this research, I am aiming at using panel data, rather than cross-sectional data, to examine the influences of the socioeconomic 1 Net enrollment rate at z level is the number of pupils who in the ages of z level (according to the education law in 2005) and currently keep schooling at z level as a percentage of z level aged population. Where, z is primary or lower secondary or upper secondary. For example, if z is primary level then the net enrolment rate at primary level is a percentage of the number of pupils who aged from 6 to 11 years old and currently keep schooling at primary level over the number of primary level aged population. 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com determinants on the dropout behavior of pupils in secondary schools in Vietnam with the aid of logistic regression model.
My study is endeavored to achieve three main objectives: (1) To determine factors theoretically affecting the decision of dropping out of school; (2) To examine factors statistically explaining the dropout behavior in secondary schools in Vietnam; and (3) To implicate ways to reduce the secondary school dropout rates in Vietnam. The main question of the research is: “What are the determinants of secondary school dropout in Vietnam?” To answer this question, I divide it into two subquestions: (1) What are the determinants theoretically influencing the decisions of dropping out of school? (2) Do these determinants statistically explain the dropout behavior in secondary schools in Vietnam? The first subquestion will be answered by recalling literature review and empirical studies in the world and in Vietnam. Determinants obtained by the first subquestion will be used for the second one by applying econometric method to analyze the secondary data VHLSS. The paper is continued with a set of sections.
Section II recalls the literature review and empirical studies in the world and in Vietnam. Section III provides an overview of education system in Vietnam with a brief picture of dropout situation during 2000-2006. Section IV describes the dataset used and research methodology. Section V presents the results based on descriptive statistics and econometric models.
Section VI comes up with main conclusions and policy implications. 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 2: LITERATURE REVIEW The issue of school dropout has attracted numerous researchers around the world. The starting point to understand the decision of dropping out of school is the standard theory on human capital investment, originally developed by Ben-Porath (1967) and Becker (1964). The theory states that benefits and costs generated by additional schooling, e.
future income improving; expenditure on schooling tuition; opportunity costs of entering the labor market late, etc., will be compared by individuals. If the marginal rate of return to additional schooling exceeds the marginal cost of education, individuals will keep schooling. The limitation of this theory is the assumption that individuals face no resource constraints. This assumption does not seem to hold in reality.
Moreover, dropping out of school is not individual decision. Children don’t decide by themselves but mostly by their parents. The household schooling decision theory releases the assumption of no resource constraints and considers an existing relationship between parents and children, in which parents play a principal role and children as an agent. In parents’ view, children’s education is considered as both consumption goods and investment goods.
Parents spend resource on children’s education because well-educated children bring satisfaction to them. Parents invest in children’s education with the hope that they will receive support from children later in life. A standard model of household decision-making in terms of children’s education is discussed in detail in a paper by Vo Tri Thanh and Trinh Quang Long (2005). In this section, I would like to briefly recall this model and also underline empirical papers in the world and in Vietnam related to the main implications of the model.1 A standard model of household schooling investment decision The household schooling investment decision model begins with an assumption that households are considered as unitary households.
It means there is no difference in preferences of parents. If parents’ preferences are not the same, they are then supposed to behave as if they are maximizing a single utility function. 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Suppose a household includes a father, a mother, and N children, in which N children are divided into m daughters and n sons. The parents’ life is divided into two periods.
They work and raise children in the first period. They retire in the second period. In the first period, income from working after subtracting a proportion of investment in their children’s education is considered as household consumption. In the second period, their consumption depends on the remittances that their children return to them.
The amounts of remittances in turn depend on the level of children’s education acquired in the first period. Hence, there is a trade-off in parents’ schooling decision between consumption in the first period and consumption together with children’s wealth in the second period. A utility function which represents the identical preferences of parents is expressed as follows: U U (C1 , C 2 , I d 1 ,.1) Where, C1 and C 2 are household consumption in the first and second periods respectively.