\ UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THEHUGUE VIETNAM THE NETHERLANDS VIETNAM- THE NETHERLANDS PROJECT OF M.A ON DEVELOPMENT ECONOMICS INTERNATIONAL REMITTANCES AND THE EDUCATION OF YOUNG GENERATIONS: THE CASE OF VIETNAM A thesis submitted in partial fulfillment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS BY r-·-80GIAoot~c8AorJ?.o~· · TRUONG f)~l HQC I<INH TE TP.HCM NGUYEN HAl NGAN HA TIIU VIEN • Academic Supervisor: ) / ~ 3 L-- DR. PETER CALKINS HO CHI MINH CITY, OCTOBER 2009 ACKNOWLEDGEMENT I would like to express my sincere gratitude to my supervisor Prof. Peter Calkins for his kind support of my Master study and research from initial to final level, for his patience, enthusiasm, encouragement and immense knowledge. His assistance has helped me a lot during the time of designing and writing this research.
I am heartily thankful to Dr. Nguyen Trang Hoai, Dr. Nguyen Minh Due and Dr. Tran Tien Khai for their comments and evaluation of my initial research proposal.
I also send my gratefulness to Mr. Truong Thanh Vu and Mr. Luong Vinh Quae Duy who help me to deal with VHLSS 2006 dataset and Stata software. Special thanks go to my friends for their support and motivation during my study at the Vietnam -Netherlands Program for M.A in Development Economics.
Last but not the least, I would like to thank my family: my parents for giving birth to me, my parents-in-law, my husband and my older brother for supporting me spiritually throughout my life. Finally, I offer my regards and blessings to all of those who supported me in any respect during the completion of the thesis. CERTIFICATION I certify that the substance of this thesis has not been submitted for any degree and is not being current submitted for any other degree. I certify that to the best of my knowledge, any help received in preparing this thesis, and all sources used have been acknowledged in this thesis.
NGUYEN HAl NGAN HA Date: 23 October, 2009 ii ABSTRACT Over the last decades, Vietnam has experienced a sharp increase in international remittances inflows from overseas migrants. The total volume of remittances accounts for approximately 6-8% of GDP. Many Vietnamese people have migrated not only with the hope of getting more income and sending more remittances to support their poor families in hometown, but also with the desire to pay school fee for their young generations. By lifting liquidity constraints, remittances raise the educational attainment of young people left behind in receipt countries.
The impact of remittances on the education of young generations has been studied in many papers. However, this relationship has not been tested empirically in Vietnam. Therefore, the contribution of this paper is to investigate empirical evidences on the link between international remittances and probability of being enrolled in schools of young individuals in Vietnamese households through exploring data of the Vietnam Household Living Standard Survey 2006 by applying Logit econometric model. Our results show that remittance receipts statistically significantly increase the probability of school enrollment, particular for girls and in rural areas.
In addition, this research also finds that the young who have to work tend to gain lower chances to go to schools than their friends without any job. Based on the findings, the author suggests many ways to improve the school enrollment rate of young individuals. Methods aiming at stimulation of remittance income are appropriate such as encouragement of labor exportation programs since Viet Kieu has been getting older and less altruistic as well as lowering cross border money transfer fees. Moreover, when reserved financial budget for young people increases via the effect of attracting more remittance receipts, number of school aged individuals participating in labor market at early ages tends to diminish further.
iii TABLE OF CONTENTS CHAPTER 1: INTRODUCTION. 6 CHAPTER 2: LITERATURE REVIEW. THE CONCEPT OF INTERNATIONAL MIGRANT REMITTANCES. THEORETICAL FRAMEWORK AND EMPIRICAL STUDIES RELATED TO THE IMPACT OF INTERNATIONAL REMITTANCES ON THE EDUCATION.
THE ANALYTICAL FRAMEWORK. 21 CHAPTER 3: OVERVIEW OF INTERNATIONAL REMITTANCES AND EDUCATIONAL ATTAINMENT OF THE YOUNG IN VIETNAM. OVERVIEW OF INTERNATIONAL REMITTANCES IN VIETNAM .