VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS DOES PROVINCIAL ECONOMIC DEVELOPMENT IN VIETNAM FOSTER INTERNAL MIGRATION? ------------------o0o---------------- Thesis Instructor: Dr. Pham Khanh Nam Student: Võ Văn Hưng CLASS 20 Ho Chi Minh City, September 2015 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CERTIFICATION “I certify the content of this dissertation has not already been submitted for any degree and is not being currently submitted for any other degrees. I certify that, to the best of my knowledge, any help received in preparing this dissertation and all source used, have been acknowledged in this dissertation.” Signature Vo Van Hung Date: 14th September 2015 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT I would like to express my deepest gratitude to my instructors in Vietnam Netherlands Program, who helped me to achieve the knowledge through interesting lessons, useful assignment, utility seminars and new information during my master studying. I greatly express my special thanks to Dr Pham Khanh Nam for all his academic recommendations through finishing thesis process.
I am grateful to all the staffs in the program have helped me to reach books and necessary documents during the learning process. My thanks are also extended to all my classmates, who have companions and share learning experiences with me through over last 2 years. Mental support from my family is one of the most bolster for my effort to finish this program. I would like to send my thanks and my love to all my family’s members.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABBREVIATIONS PGDP. Provincial Gross Domestic Product PCI. Provincial Competiveness Index GSO. General Statistics Office of Vietnam SEM.
Structural Equation Modeling FEM. Fixed Effect Model REM. Random Effect Model OLS. Ordinary Least Squares VIF.
Variance Inflation Factor HCMC. Ho Chi Minh City VND. Vietnam Dong (Vietnamese Currency) LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT This paper investigates the impact of provincial economic development on internal migration in Vietnam based on the complex casual relationship between migration and economic development. We examine that impact for further understanding about the determinants could lead to human migration decision beyond the difficulties at the new destinations.
Tabulations data about migration flows from GSO database in duration 2005-2013 and national statistical datasets from Statistical Yearbook about provincial development are used to analyze the impact of economic development on migration. The quantitative results of Structural Equation Modeling (SEM) and Common Panel Methods indicated that the higher economic development provinces have higher immigration attractiveness. Key Words: Migration, economic development, Vietnam, population, origin areas, destination areas, employment, jobs. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.
Research objectives and research questions. Scope of the study. Organization of the thesis .4 CHAPTER 2: LITERATURE REVIEW 2. Concepts of migration.
Harris – Todaro theory. Other cognizance about migration. Empirical studies on migration. Economic development and other factors.
Determinants of migration. Linkages between economic development and migration .14 CHAPTER 3: RESEARCH METHODOLOGY 3. Analytical framework and hypotheses. Structural equation model (SEM).
Other common panel data methods. Pooled OLS model. Fixed effects model (FEM). Random effects model (REM).
Testing for appropriate models. F-test for choosing FEM or OLS. Breusch - Pagan LM-test for choosing REM or OLS. Hausman test for choosing FEM or REM.
26 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Structural equation model (SEM). Common panel data techniques .32 CHAPTER 4: EMPIRICAL RESULTS 4. Overview about inter-provincial migration in Vietnam.
Results from simultaneous equation method (SEM). Robustness test - common panel data methods. Ordinary Least Squared Method (OLS). Fixed Effect Model (FEM).
Random Effects Model (REM) .49 CHAPTER 5: CONCLUSION AND POLICY IMPLICATIONS 5. Limitation of the study. Suggestions for further studies .60 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1 INTRODUCTION 1. Problem statement The modernization of the country is always an important work in the context of the economy increasingly dynamic and society moves deeper in integration with the world.
One of the top priorities for a sustainable development and modern society is to reduce social inequality and eliminate poverty. Along with the existence and development of the country, leaders, policy makers and scientists always seek for better solutions and improve the policies in order to match those requirements. However, in a most natural way, it has never been a simple task and can be done in the short - term to get the immediate results but it is a difficult and long - term process. Vietnam never could be an exception case in suffering the negative effect from development process.
These negative effects are the huge factors causing inequality, poverty, stagnation, unkempt for the social and economic development not only in the present but also for future generations. One downside is that people often together rushed to the area where the development which is generally higher than other areas, as an allusion proverb “lua thoc dau bo cau theo do” in Vietnamese. It is easily to espy the phenomenon of rural people leave their fields for the big cities to find jobs. The nature of that phenomenon can be interpreted as the migrant attempt to come to higher advantage destinations with the expectation of improving their lives (De Jong & Fawcett, 1981).
However, the out-control migration cause the imbalance in population density such as overload status at the large city or the slow growth rate in rural areas since the lack of labor. In addition, Migration leads to many serious social problems. For instance, mass-migration could create environmental pollution because of the inadequate infrastructure (Bilsborrow, 1992) and theft could also be a painful problem for downtown citizen (Deshingkar, 2006) because the migrants fall into deadlock situation. There are enormous difficulties for any migrant when they have to resettle with many different conditions at the new destinations, but in reality a huge amount of 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com migrants still migrate day by day because of these motives: economic motives, social motives and residental satisfaction motives (De Jong & Fawcett, 1981).
Along with many factors can affect on the internal migration such as distance among provinces, difference in population density, education facilities, recreation facilities, living standard (Dang, Goldstein & McNally, 1997), cost of moving (Greenwood, 1975), et cetera; Difference in provincial economic development is also a factor contributes to the migration activities since the province has higher development index will more attract migrants than others. In other words, high provincial development leads to the expectation in improving migrant living conditions and becomes an economic motive in migration flows. This study aims to examine the impact of provincial economic development on internal migration to interpret whether high economic development provinces attract migrants and whether the encouragement of economic development – an instrument for redistribution population density? Finding out this linkage support the argument that Government could intervene migration flow via encourage development tools in order to avoid the backward contexts had mentioned above. Throughout the history of the country, Vietnam has had numerous internal- migration flows with different scales, from the early primitive times, through thousands feudal years until today.
Many of them are forced migrations or reluctant migrations due to Government’s policy or natural circumstances such as migrations in 1954 and 1975 or the migration by policy of "new economic zone". However, the forced migrations have its certain limitation such as the unexpected from those forced to change their habitat. This phenomenon leads to the reactions against this compulsion, for example the resistance, escapade or fake declared information. As the arguments stated above, the consequence of residential overcrowding in one area raises the stagnation in the economic development process.
This goes against the expectations of migrants with the purpose of improving their living, which included economic factors, the ambivalence is extremely clear. Therefore, in order to limit the downside that caused by these consequences, policy makers need to find solutions to redistribute population density. 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Recently, along with the development and integration, spontaneous migration almost completely replaced the forced migration, the issuing macroeconomic policies so that people could freely to migrate by their own decisions but still within the control of the government is the necessary and urgent policies. Stemming from the above practical requirements, we carried out the study “Does provincial economic development in Vietnam foster internal migration?” 1.
Research objectives and research question The research is constructed to quantify the relationship between provincial economic development and migration flows across provincial level in Vietnam by specific objectives as follow: - To have a further understanding about the role of income for migrant’s decision. - To interpret how urbanization impact on migration decision and to identify the migrant’s perception of urbanization for their moving motivation. - To study the impact of industrial structure on internal migration and propose policy implications for the future establishing of industrial areas. Research questions The transference of human is natural and undeniable in the history of mankind all over the world.
In order to recognize above realities, it is deserved to assert that migration has possibility to fetch both opportunities and challenges for development. In spatial contexts and specific time, the interaction between migration and development will be different. In a specific context of Vietnam, by using secondary data and analytical models, the goal of this study is to find relevant answers for these questions below: - Do people tend to move to higher income provinces within Vietnam? - Whether the establishing of industrial park could be seen as a good instrument for entice people to appointed destinations? - Do Migrants choose high urbanization rate areas for their resettlement purpose in Vietnam? 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Scope of the study This study focuses on internal migration with economic is the main motivation, so migrants were mentioned above include people who move from one province to another province, irrespective resettlement duration.
We attempt to examine the migration (base on the GSO database) and the provincial development in 63 provinces (base on the statistic yearbook) in the 2005 – 2013 periods. Organization of the thesis This thesis contains five chapters, order and names of the chapters are as follows: Chapter 1: Introduction Chapter 2: Literature review Chapter 3: Methodology Chapter 4: Empirical results Chapter 5: Conclusion and policy implications Chapter 1 introduces the motivation of studying the effect of economic development on migration. The content of this chapter also stores the ability for application this study in reality. Chapter 2 reviews the past theories about migration, the determinants of migration and the relationship between economic development factors and migration.
Chapter 3 presents the way to construct this research, testing, hypothesis and model using to achieve the appropriate estimation. Chapter 4 analyzes the empirical results after regressions. This chapter also interprets the relationship among variables and displaces main findings. The last chapter – chapter 5 concludes the content of the study and shows the policy recommendations.
This chapter also raises the limits of research and suggestions for further studies. 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 2 LITERATURE REVIEW 2. Concepts of migration Migration is the changing of the domicile of individuals or groups of people. It is an integral part of the population dynamics and has close relationships with many important issues of sustainable development (Goldscheider, 1971).
The changes in culture, economics, politics and society impact directly on migration decisions of people. Therefore, migration could be seen as changes in demographic, which is synthesized from the changes in accommodation. There is always existed the interaction between migrants and new destination’s environment characteristics. Migrants have to suffer the disturbed habitat cause by social characteristics and community nature at destinations.
Beside, migrants also contribute to the transformation of the destination’s properties, in reverse.