Luận văn thạc sĩ UEH income diversification and the role of non farm activities , a case of rural

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UNIVERSITY OF ECONOMICS

HO CHI MINH CITY

VIETNAM

INSTITUTE OF SOCIAL STUDIES

THE HAGUE

THE NETHERLANDS

VIETNAM- NETHERLANDS

PROGRAMME FORMA IN DEVELOPMENT ECONOMICS

INCOME DIVERSIFICATION AND THE ROLE

OF NON-FARM ACTIVITIES: A CASE OF

RURAL VIETNAM

By

LEVINHHOA

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

HO CHI MINH CITY, MAY 2011

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UNIVERSITY OF ECONOMICS

HO CHI MINH CITY

VIETNAM

INSTITUTE OF SOCIAL STUDIES

THE HAGUE

THE NETHERLANDS

VIETNAM - NETHERLANDS

PROGRAMME FORMA. IN DEVELOPMENT ECONOMICS

INCOME DIVERSIFICATION AND THE ROLE

OF NON-FARM ACTIVITIES: A CASE OF

RURAL VIETNAM

A thesis submitted in partial fulfillment of the requirements for the degree of

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

Academic Supervisor:

Dr. HA THUC VIEN

HO CHI MINH CITY, MAY 2011

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ACKNOWLEDGEMENTS

First of all, I appreciate and sincere gratitude to the Vietnam Netherlands Program for

granting me an academic course to pursue the Master of Art in Development

Economic. I would like to give my sincere thank to my supervisor professor Dr. Ha

Thuc Vien, who has straight accepted to guide me in this thesis. He supervised me

with enthusiasm, efficiency and pragmatism, and always provided me with ideas and

guidance. During my thesis, I have benefited from the assistance of Mr. Nguyen

Trung Hieu, Mrs. Nguyen Thi Kim Cue (Vietnam- Netherlands Programme for M.A.

in Development Economics). I want to thank Mrs. Nguyen Thi Kim Cue for her very

pertinent comments and frankness. I've really appreciated Mr. Nguyen Trung Hieu

availability for technical help as well as for guiding me towards a higher level in

econometrics. Professor Peter Calkins has also commented on an earlier version of

this thesis. I would also like to express my sincere thanks to all of you.

HCMC, Summer 2011

LE VINHHOA

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ECLARATION

declare that "INCOME DIVERSIFICATION AND THE ROLE OF NON￾ARM ACTIVITIES: CASE OF VIETNAM" is my own work, that it has not been

ubmitted to any degree or examination at any other universities, and that all the

ources used or quoted are indicated and acknowledged by complete references.

HCMC, April 2011

LE VINHHOA

11

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ABSTRACT

his thesis examines how diversification level of household income in Vietnam. The

suits show a trend in increasing number of income resources. The fact that one third

f the households in the studied have not engaged yet in any form of economic

iversification (if exclude money transfer), both wage and non-farm activities

ontribute to an increased average total household income. Increasing rural income

trongly relies upon the development of non-farm activities, including the

evelopment of a local rural industry, tourism as well as migration. Non-farm

ctivities are a part of rural economy in Vietnam today and it is a significant income

ontributor for many rural households. Non-farm income has good impacts on

ousehold income and agricultural sector is not the leading employment sector

anymore .

111

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TABLE OF CONTENTS

CKN 0 WLEDG EMENTS ......................................................................................... i

ECLARA TI 0 N ......................................................................................................... ii

BSTRACT ................................................................................................................. iii

ABLE OF CONTENTS ........................................................................................... iv

1ST OF TABLE ........................................................................................................ vi

1ST OF FIGURES ................................................................................................... vii

HAPTER 1: INTRODUCTION ............................................................................... 1

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

2. The objectives of study ........................................................................................ 3

3. Research question ................................................................................................ 3

4. Structure of thesis ................................................................................................ 3

HAPTER II: LITERATURE REVIEW ................................................................. 4

1. Definitions: .......................................................................................................... 4

2. Factors effect to income diversification .............................................................. 5

3. Household non-farm activities ............................................................................. 7

3.1. Declining a share of agriculture in GDP and labor ............................................. 7

3.2. Increasing role of non-farm activities in household economy ............................ 9

4. Empirical Literature ........................................................................................... 11

CHAPTER III: RESEARCH METHODOLOGY ................................................. 18

1. Model specification-dependent variable ............................................................ 18

2. Model specification-independent variables ....................................................... 21

3. Econometric Model ........................................................................................... 22

CHAPTER IV: DATA ANALYSIS AND DISCUSSIONS .................................... 26

1. Data description ................................................................................................. 26

IV

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