Luận văn thạc sĩ UEH does provincial economic development in vietnam foster internal migration

VIETNAM - NETHERLANDS PROGRAMME

FOR M.A IN DEVELOPMENT ECONOMICS

DOES PROVINCIAL ECONOMIC DEVELOPMENT IN

VIETNAM FOSTER INTERNAL MIGRATION?

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Thesis

CLASS 20

Ho Chi Minh City, September 2015

Instructor: Dr. Pham Khanh Nam

Student: Võ Văn Hưng

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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

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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.

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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)

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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.

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CHAPTER 1: INTRODUCTION

1.1. Problem statement ...................................................................................................1

1.2. Research objectives and research questions............................................................2

1.3. Scope of the study....................................................................................................3

1.4. Organization of the thesis........................................................................................4

CHAPTER 2: LITERATURE REVIEW

2.1. Concepts of migration .............................................................................................5

2.2. Migration theories....................................................................................................6

2.2.1. Harris – Todaro theory....................................................................................7

2.2.2. Lee’s theory.....................................................................................................8

2.2.3. Lewis’s theory.................................................................................................9

2.2.4. Other cognizance about migration ................................................................10

2.3. Empirical studies on migration..............................................................................11

2.3.1. Economic development and other factors.....................................................11

2.3.2. Determinants of migration ............................................................................13

2.3.3. Linkages between economic development and migration............................14

CHAPTER 3: RESEARCH METHODOLOGY

3.1. Analytical framework and hypotheses ..................................................................17

3.2. Estimation methods ...............................................................................................21

3.2.1. Structural equation model (SEM).................................................................21

3.2.2. Other common panel data methods...............................................................23

a. Pooled OLS model ............................................................................................23

b. Fixed effects model (FEM) ...............................................................................24

c. Random effects model (REM) ..........................................................................24

3.2.3. Testing for appropriate models.....................................................................25

a. F-test for choosing FEM or OLS ........................................................................25

b. Breusch - Pagan LM-test for choosing REM or OLS.........................................25

c. Hausman test for choosing FEM or REM...........................................................26

3.3. Model specification ...............................................................................................26

TABLE OF CONTENTS

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3.3.1. Structural equation model (SEM).................................................................27

3.3.2. Common panel data techniques....................................................................29

3.3.3. Migration criteria ..........................................................................................30

3.3.4. Instrument variable .......................................................................................31

3.4. Data sources...........................................................................................................32

CHAPTER 4: EMPIRICAL RESULTS

4.1. Overview about inter-provincial migration in Vietnam........................................34

4.2. Descriptive statistics..............................................................................................37

4.3. Regression results..................................................................................................41

4.3.1. Results from simultaneous equation method (SEM)....................................41

4.3.2. Robustness test - common panel data methods ............................................44

a. Ordinary Least Squared Method (OLS) ............................................................44

b. Fixed Effect Model (FEM)................................................................................47

c. Random Effects Model (REM) .........................................................................49

CHAPTER 5: CONCLUSION AND POLICY IMPLICATIONS

5.1. Main findings.........................................................................................................53

5.2. Limitation of the study ..........................................................................................54

5.3. Policy implications................................................................................................54

5.4. Suggestions for further studies..............................................................................55

References................................................................................................................56

APPENDIX..............................................................................................................60

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1

CHAPTER 1

INTRODUCTION

1.1. 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

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