Problem statement
Over the last two decades, Vietnam has achieved significant economic growth while effectively reducing poverty levels This progress is closely linked to notable changes in population distribution and mobility across the country.
The economic reforms implemented in 1986 significantly influenced migration in Vietnam through three key aspects Firstly, the introduction of the household contract system in agriculture freed farmers from land restrictions Secondly, while the household registration system persists in urban areas, it no longer restricts access to essential goods and employment opportunities Lastly, Vietnam's integration into the global economy has spurred foreign direct investment, drawing migrant workers to burgeoning industrial and service sectors.
The migration from rural to urban areas has significantly contributed to urbanization in Vietnam, leading to structural population changes across regions This shift has facilitated the transition of the labor market from agriculture to the manufacturing and services sectors, playing a crucial role in the country's modernization and industrialization efforts.
According to Todaro and Harris (1970), rural to urban migration significantly contributes to urban unemployment and underemployment in major cities of developing countries This migration leads to a depletion of the rural labor force while simultaneously generating unemployment for both skilled and unskilled workers in both the formal and informal sectors of urban areas.
Ho Chi Minh City stands as Vietnam's largest economic hub, attracting more investors than any other region in the country By the end of 2006, it accounted for approximately 26.9% of foreign direct investment (FDI) projects and 24.1% of total registered capital, according to the Ministry of Planning and Investment (MPI) report from October 2006.
This thesis explores the concept of relational migration and its circumstances, specifically examining its connection to urban unemployment in Ho Chi Minh City It questions whether local government intervention is necessary to attract skilled migrants and discusses potential policies that could alleviate the unemployment situation in the region.
This thesis investigates the determinants of migration's impact on unemployment in urban areas Utilizing instrumental variables and cross-sectional data techniques, the study aims to uncover the relationship between migration patterns and unemployment rates.
The research objective of the thesis
This thesis aims to analyze the characteristics of migrants in relation to urban employment, specifically in Ho Chi Minh City It explores the economic behaviors driving rural-to-urban migration and identifies the key determinants of urban unemployment Furthermore, it proposes alternative policy designs to mitigate urban unemployment challenges The research addresses critical issues surrounding these topics.
To analyze the personal characteristics effect on finding job in Ho Chi Minh City
To explore the link between migration and wage level which affect employment level at destination area
What is the labor market performance of migrants in term of their wages and the probability of unemployment?
Main hypothesis to be tested
This study aims to explore the relationship between migration and unemployment in urban areas, considering the significant opportunities and challenges that migration presents for the country's development and the employment landscape of both migrants and non-migrants.
Individuals often relocate to areas with higher wages to enhance their income, driven primarily by wage differentials stemming from geographical variations in urban labor market demand and supply This highlights the significant relationship between migration patterns and the wage levels at the destination.
The relationship between migration and unemployment in urban areas is analyzed through the lens of the human capital model, focusing on whether migrants experience a unique likelihood of unemployment compared to non-migrants.
The scope and limitation of the thesis
The limitation ofthe thesis
This thesis focuses on assessing the relationship between migration and wage levels, as well as the likelihood of unemployment among migrants compared to non-migrants in Ho Chi Minh City, rather than offering a comprehensive overview of the social, economic, and health conditions of migrants in the area.
The 2004 Vietnam Migration Survey was a micro-level study aimed at understanding internal migration in key destinations across Vietnam, including rural areas, industrial zones, and major cities Its primary objective was to enhance knowledge about migration outcomes within the country, focusing on the decision-making processes and results of migration The findings of this survey, particularly concerning Ho Chi Minh City, provide valuable insights into the dynamics of internal migration in Vietnam.
City, will be analysis and evaluate.
Methodology
The thesis method used IS mainly quantitative combining both descriptive and regression analysis
The analysis begins with the application of descriptive statistics to summarize the relevant database Subsequently, an econometric model is employed to investigate the relationship between dependent and independent variables This relationship is assessed using primary data collected from the Vietnam General Statistics Office (GSO) and the United Nations Population Fund (UNFPA) in 2004.
Data source
The study uses primary and secondary data source from Vietnam Migration Survey
2004 by General Statistic Office and UNFPA conducted 2004
The 2004 Vietnam migration survey gathered comprehensive data on respondents' backgrounds, migration histories, details of their most recent moves, current living conditions, health status, and family planning practices, focusing on both migrants and non-migrants.
Other information sources from report, articles and newspaper
Chapter 2: Literatures review This part will discuss of the literature review analyze migration its relation with urban unemployment in developing countries
Chapter 3: Migration and urban unemployment in VietNam, the case of Ho Chi Minh City
Chapter 5: Econometric analysis and Results
Chapter 6: Conclusion and Policy implications
2.1 MIGRATION AND FACTORS AFFECT ON MIGRATION
Migration is a significant socio-economic phenomenon occurring globally, encompassing various forms of residential changes (Goldscheider, 1971) It arises from shifts in economic, cultural, and political structures, leading to substantial alterations in social dynamics Defined as a demographic process, migration involves changes in residential locations across geographic or administrative regions, representing a transformative act for both migrants and the communities they leave and join The impact of migration extends to demographic and historical aspects, influencing institutions such as marriage and family Additionally, migration decisions are influenced by individual characteristics, including age, sex, and education, which determine a person's likelihood to migrate (Sjaastad, 1962).
Migration to urban areas poses significant challenges in developing countries, including issues related to employment, environmental sustainability, and housing shortages The primary objective is to mitigate the adverse effects of urbanization while facilitating a smoother transition As urbanization, a key aspect of modernization, unfolds, it inevitably brings along various mistakes and difficulties Consequently, diverse settlements have emerged and continue to develop both within city centers and their outskirts due to ongoing migration trends.
Lee (1969) emphasized that migration is a selective process influenced by factors such as age, gender, and social class, which affect individuals' responses to push and pull factors and their ability to navigate obstacles He argued that push factors, like poverty, unemployment, and land shortages in rural areas, often outweigh pull factors, compelling farmers to leave their homeland in search of better opportunities Conversely, pull factors, such as attractive job and income prospects in urban areas, draw individuals away from their native regions, prompting them to settle and seek employment in cities.
Larson and Mundlak (1997) highlight that rural to urban migration can enhance the income levels of remaining agricultural workers, as the same output is produced with fewer laborers This increase in household income helps to narrow the rural-urban income gap, potentially discouraging further migration for income purposes Additionally, the rural sector benefits from remittances sent by migrants, with Williamson (1988) indicating that these remittances account for 10 to 13 percent of the urban incomes of rural migrants in Africa and Asia.
The core of this phenomenon lies in understanding that economic factors significantly influence both rural and urban migration This migration, in turn, reshapes sectoral and geographic economic activities, impacts income distribution, and affects overall population growth.
In Vietnam, rural-urban migration is driven by individuals leaving the countryside in search of better socio-economic opportunities in cities and towns The fluctuating and often depressed prices in agricultural communities, coupled with increased global integration, make it increasingly challenging for rural residents to sustain their livelihoods on small farms As a result, the desire to migrate, particularly among the youth, is prevalent, as urban areas offer greater job prospects Although migrants often face crowded living conditions and long working hours, they can expect to earn significantly higher incomes compared to their rural employment or farming endeavors.
Migration decisions are influenced by a complex interplay of economic, social, educational, and demographic factors, which can vary significantly across and within geographic regions Key drivers include disparities in employment opportunities, wage rates, and living conditions between rural and urban areas, as well as individuals' awareness of these differences and their aspirations for a better life The nature of migration decisions is shaped by both origin and destination conditions, particularly in rural areas where household and community-level factors play a crucial role These factors impact the income-earning potential of household members, influenced by the quality and quantity of available land or local economic opportunities.
Conditions in area of original
Internal factors (Market, price, trade/capital flows)
Urban policies (Economics, environment, demographic, socio - economic, infrastructure)
Individual/household characteristics (Age, education, marital status, previous migration, work experience of member, family size/composition, land/assets, migration network)
Local community Conditions in possible areas of destitution
Adapted to Richard E Bilsborrow, Migration, population change, and the rural environment, p78, ECSP report, Issue 8, 2002
2.1.3 The effects on origin and destination areas
The production structure of an economy significantly influences individual migration decisions, as seen in Vietnam, where changes in agriculture have prompted rural residents to migrate to urban areas This rural-to-urban migration can lead to increased urban unemployment if cities cannot absorb all incoming migrants However, many companies may prefer to hire migrant labor, as these workers typically have lower job expectations and accept lower wages Additionally, destination areas often benefit from this migration, as rural migrants take on undesirable jobs, contribute to economic growth, and stimulate urban consumption.
2.2 MIGRATION AND URBAN UNEMPLOYMENT IN DEVELOPING COUNTRIES
Rural poverty in developing countries, characterized by low agricultural incomes, low productivity, and underemployment, is driving many individuals to migrate towards sectors with better job prospects Recent studies indicate a rise in unemployment within rural areas, further exacerbating the income disparity between rural and urban regions.
Population pressure has been identified as a significant factor contributing to rising poverty and rural out-migration, as the limited capacity of agriculture to absorb the growing labor force, coupled with advancing technology, often leads to increased unemployment As populations expand, more individuals are compelled to migrate to urban areas in search of job opportunities, unless substantial enhancements in agricultural practices and rural systems occur However, population pressure is not the sole cause of escalating unemployment and poverty in rural regions; equally critical factors include low agricultural investment rates, fragmented land ownership, and disparities in land and asset distribution A major contributing factor is the reliance on imported agricultural technology from labor-scarce countries, which tends to prioritize capital over labor.
Overpopulation in developing countries, particularly in Asia and Africa, coupled with high fertility rates, has led to a growing number of landless and near-landless individuals As land becomes increasingly fragmented, many of these peasants are migrating to urban areas in search of non-agricultural employment opportunities.
Rural-urban migration is driven by various factors, particularly among the rural poor and middle to upper classes with limited education Many individuals are drawn to urban centers due to the perceived economic and social opportunities, while others seek to further their education or escape the unsatisfactory prospects of rural living.
The rapid development of industrial infrastructure in cities of developing countries post-independence has spurred significant migration from rural areas, driven by the availability of job opportunities Until recently, government policies have prioritized investments in public and social services in urban centers, especially in large cities, while rural regions have been largely overlooked.
In many developing countries, rural migrants are increasingly drawn to primate cities, where essential services, industrial zones, and cultural opportunities are concentrated This trend is facilitated by advancements in transportation systems, which diminish the impact of distance as a barrier to migration Improved transportation and communication not only lower migration costs but also bridge the cultural divide between migrants' origin and destination, making the transition smoother and more accessible.