UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL HO CHI MINH CITY STUDIES VIETNAM THE HAGUE NETHERLANDS VIETNAM – NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS LEAVING UNEMPLOYMENT OF AN INDIVIDUAL: THE IMPACT OF UNEMPLOYED BENEFITS AND FAMILY’S INCOME By LE THI CAM NHUNG MASTER OF ARTS IN DEVELOPMENT ECONOMICS Ho Chi Minh City, December 2015 TIEU LUAN MOI download : skknchat@gmail.com TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT This paper aims to analyze the determinants to affect the probability of having a job after a period of being unemployed of Vietnamese labor by using Vietnam household living standard survey. The study covers 1,156 observations by filtering all people in labor age who were unemployed in 2010 to analyze their situation in 2012. Demographic characteristics of each person are focused in order to discover the reasons to help people find a job meanwhile the macroeconomics factors are considered to be unchanged. Findings in this research emphasize that income of family, unemployed benefits, money spending for inpatient fee contributed to demotivate people in seeking a job.
On the contrary, higher education could be helpful for an individual to leave unemployed circumstance. Keywords: unemployed people, determinants for having a job, income, education, fee i TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENT Foremost, I would like to sincerely thank Dr. Pham Thi Bich Ngoc. I am grateful to her enthusiastic instruction crucial advice and valuable guidance during the time I worked with this thesis.
In addition to this, I would like to express my respect and thank Dr.Truong Dang Thuy who gave me very useful advice and comments. More special thanks to all professors and staff of Vietnam-Netherlands Program as well as classmate and Vietnam-Netherlands Program alumni. Finally, I would like to thank you, my family, who motivated me with the master program and support me to finish this thesis. ii TIEU LUAN MOI download : skknchat@gmail.com ABBREVIATIONS GDP Gross Domestic Product VHLSS Vietnam Household Living Standard Survey Sd Standard deviation Coef.
Coefficient NBS National Bureau Statistics iii TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS ABSTRACT. iii TABLE OF CONTENTS.iv LIST OF TABLES .vi LIST OF FIGURES. vii CHAPTER 1: INTRODUCTION .4 Data and methodology .3 CHAPTER 2: LITERATURE REVIEW. Some definitions and concepts.
Type of unemployment .3 Definition of leaving unemployment. The influence of demographic characteristics on leaving unemployment. The impacts of unemployment benefits. Income and leaving unemployment.
Health status and being unemployed. Summary of empirical researches about leaving unemployment .12 CHAPTER 3: DATA AND METHODOLOGY .1 Modeling for probability of leaving unemployment. Econometric model in thesis. Data consolidation and list of variables .23 iv TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 4: SUMMARY STATISTICS, EMPIRICAL RESULTS, AND ANALYSIS.
Overview of unemployment in Vietnam. Expenditure for healthcare. Regression and analysis. T-test for significant statistics variables.
Descriptive statistics for type of jobs of employed people .40 CHAPTER 5: CONCLUSION AND POLICY IMPLICATION .54 v TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 3.1: List of variable in unemployed benefits group Table 3.2: List of variables in health status group Table 3.3: List of variables in family income group Table 3.4: List of variable in demographic characteristics group Table 4.1: Summary of unemployed benefit variable in 2012 Table 4.2: Summary of expenditure for healthcare in 2012 Table 4.3: Summary of family income variables in 2012 Table 4.4: Summary of age variable Table 4.5: Determinates of unemployment leaving 2010 and 2012 Table 4.6: the role of partnership, gender, and unemployed benefits Table 4.7: T-test for medical internal fee of 2012 Table 4.8: T-test for income of household in 2010 Table 4.9: T-test for unemployed benefits in 2012 Table 4.10: T-test for income by property in 2012 Table 4.11: Job types of employed individual in 2012 Table 4.12: the average working hour per days of employed people in 2012 Table 4.13: the average working days per months of employed people in 2012 vi TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 3.1: The relationship between leaving unemployed and individual’s factors Figure 4.1: Exit rate out of unemployment by gender Figure 4.2: Marital status of unemployed group in 2010 and 2012 Figure 4.3: Marital status of employed group in 2010 and 2012 Figure 4.4: The status of signed labor contract of employed individuals in 2012 Figure 4.5: The status of obtaining unemployment insurance of employed individuals in 2012 vii TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 1: INTRODUCTION 1.Problem statement Unemployment has brought a lot of consequences to not only the economy but also the society and individuals (Layard et al, 2005). First of all, a higher payment that this phenomenon can cause to the society is insurance, pension, subsidiary as well as resulting a waste of human resources. In addition, gross domestics product might drop because individuals faced with the unemployed situation. Secondly, in the situation of jobless and less income, it is easier for an individual to turn to crime to meet financial needs.
This action could result in an unstable situation and slow development for society (Jensen et al, 2003). Under the pressure of earning money for surviving, people are easier to get the sickness and health problems. Furthermore, some people who could not suffer from unstable circumstances and they did wrong behaviors such as suicide or disregarding themselves and lives. On the other hand, a good work could make an individual to develop their skills as well as have some money to save for family and their activities, the better job people get, the most satisfied people feel in their lives (Drobnič et all, 2010).
Hence, the unemployed situation of an individual could be explored deeply to find a solution to decrease such an issue. In addition, time to find a job should be reduced to prevent demotivation for people in the time of waiting. According to data from General Statistics office, the unemployment rate of Vietnam is quite low at 1.96 % in 2012, this number increased and reached 2. Nevertheless, this rise is not critical.
Although the unemployment rate is low, the rate does not really reflect the overall picture of labor employment because of some following reasons. Underemployment is not reflected in the overall unemployment rate (Fields,1975). Besides, that laborers who are on the way to quit the job and find a new one are not mentioned. From any point of view, unemployed situation do matter for government, economist and each person.
In the case of Vietnam, during the period from 2009 to 2010, Vietnam had lost half million and one million jobs in 2009, 2010 respectively due to economics slowdown (Cuong, 2010). This event could threaten the development of society as well as living standard of citizens. Hence, it is necessary to find out the solutions to reduce the unemployed situation to help employee and family release burden of physical needs. Researchers studied on the impacts of economic recession to labor market and 1 TIEU LUAN MOI download : skknchat@gmail.com employment in Vietnam.
Kien et al (2009) found that trade liberalization in Vietnam can help expand exports in Vietnam, which creates more opportunities and demand in the labor market. As the results, employment would be improved thanks to such an activity. Zhu (2005) researched the change on human resources management in Vietnam during Asian crisis and found that Vietnamese management system for human resources changed from stable to be more competitive, flexible and market-oriented to adapt. In general, many types of research in macroeconomics to look for the influence of changing in the economy to labor demand and supply.
However, it has less paper to find the determinants to support individuals to find a job. This thesis will fill the gap and concentrate on how personal factors could help an individual to have a job after unemployed time. The distinct in personal circumstances could lead to the different in career path and income. Hence, Vietnam needs a research to determine which demographic characteristics influenced to the exit of the unemployed situation.
Furthermore, the result could bring a clear picture to policy makers in order to reduce the unemployment rate in Vietnam. There were many economists studying the possibility to exit unemployed status. Among them, Nickell (1979) used a logit model to estimate the probability of leaving unemployment using the household Data of British in 1978. This research created a basement for the following ones.
Although the technique improved year by year, however, Nickell’s method could be applied to study the probability of leaving unemployment in Vietnam.Research objectives There are three main research objectives needed to focus in this study. In general, all studies aims to find out the probability of leaving unemployment in Vietnam thank the data of Vietnam household survey in 2010 and 2012. Firstly, this thesis will study the probability of leaving unemployment of people in 2012 who were unemployed in 2010. The determinants to affect probability were divided into four groups: unemployed benefits, health status, family income and demographic characteristics.
Secondly, we analyze the impact of unemployed benefits on exiting unemployment with the role of gender and partnership of individuals. Thirdly, given person who had jobs in 2012, we examine their types of job and how much time they spent for such a job they got. 2 TIEU LUAN MOI download : skknchat@gmail. Research questions In order to address all of research objectives, the following questions should be answered: - What are the determinants of leaving unemployment in 2012 for those people who were unemployed in 2010? - How do gender and partnership of individuals play a role in interfering unemployed benefits on leaving unemployment? - Finally, once leaving unemployment, what do individuals work in term of types of jobs and working time? 1.4 Data and methodology Data of Vietnam Household Living standard Survey (VHLSS) in 2010 and 2012 are used in this thesis.
The GSO conducted this survey every two years and more than 30,000 individuals of the household were interviewed. Information is given such as the circumstances of income of the household, the situation of working of each individual as well as the health status and educational background. Basing on the dataset of 2010, a sample of unemployed people is extracted, then employment situation of these individuals will be in 2012. Accordingly, the sample could be divided into two groups: keeping unemployment and leaving unemployment.
Finally, data consist of 1,156 observations including 767 people remaining unemployed situation and 389 persons exiting unemployment. In this thesis, we study the probability of leaving unemployment or heaving a job and the leaving unemployment might not focus of its economic definition, it is simple to consider people who have a job is leaving unemployment and who don’t have are unemployment. Data is covered within VHLSS only, thus, macroeconomics factors are considered to be unchanged from 2010 to 2012 although it is not realistic. However, only internal factors of the individual should be explored to answer research problem and the question that which affected their probability of having a job.
Logistics regression is applied to research the probability of leaving unemployment. Thesis structure The thesis is designed into four parts within four chapters. Firstly, chapter one is the introduction to brief about the thesis including problem statement, the scope of study and research objectives. The next one is chapter two to show literature review from 3 TIEU LUAN MOI download : skknchat@gmail.com previous studies, this phase is indicating about theories, research problem, as well as methods economists used to research on such a problem is mentioned in this part.
The third chapter is data and methodology consisting of econometrics model, a framework for analysis, data and variables are introduced in this chapter. The fourth chapter expressed the regression and results. Finally, chapter five summaries what message transferred as well as some policy implication. 4 TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 2: LITERATURE REVIEW 2.
Some definitions and concepts 2.