Household characteristics impact on rural to urban migration the case of quang ngai province

NATIONAL UNIVERSITY OF HCM UNIVERSITY OF ECONOMICS VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM — THE NETHERLANDS PROJECT FOR M.A IN DEVELOPMENT ECONOMICS HOUSEHOLD CHARACTERISTICS IMPACT ON RURAL TO URBAN MIGRATION THE CASE OF QUANG NGAI PROVINCE THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE RECIUIREMENT FOR THE DEGREE OF MASTER OF ARTS IN DEVELOPMENT ECONOMICS BY DUONG DINH QUOC TR Academic Supervisor: Dr LE THI THANH LOAN HO CHI MINH CITY, OCTOBER 2007 CERTIFICATION “I certify that the substance of this dissertation has not already been submitted for any degree and is not currently submitted for any other degree I certify that to the best of my knowledge and help received in preparing this dissertation and all sources used, have been acknowledged in this dissertation.” DUONG DINH QUOC ACKNOWLEDGEMENTS Fist of all, let me express my thanks all organizations and member those found Vietnam - Netherland project, all lectures and staffs of the project for useful lessons and latest knowledge I would like to express my special thanks to my academic supervisor Dr Le Thi Thanh Loan for his helpful guidance and assistance during the writing of this thesis I also deeply thanks to Dr Nguyen Trong Hoai and Dr Nguyen Hoang Bao for their valuable suggestions and advices to research this topic Following, I send my thanks to Librarian, Ms.Chi, who helps help me in finding necessary document and reference boCt ks Thank to my friends in Quang Ngai - the inters iewers help me in collecting surveyed data in Cluang Ngai province Many thanks sent to my classmates, who shared with me joys and obstacles during more two years attending this program My thanks send to my wife and sons who shared and encouraged mc during my - learning and doing this study ABBREVIATIONS HCM: HoChiMinh GSO: General Statistics Office NEZ: New Economic Zone DAN: Development Analysis Network VLSS: Vietnam Living Standard Survey USD: United State Dollar (American Currency) VND: Vietnam Dong (Vietnamese Currency) TABLE OF CONTAINS CHAPTER 1: INTRODUCTION _ 1.1 Problem statement 1.2 Research objectives 1.3 Research questions 1.4 Methodology 1.5 Organization of the thesis 3 CHAPTER 2: LITERATE REVIEW '• O›-erview of migration: iJ-pipal theories 2.2 Lewis model .6 2.3 Push and pull factor theory 2.4 Harris -Todaro model 2.5 New Economics of Labour Migration theory 11 2.6 Comments on the theories .12 CHAPTER 3: MIGRATION IN VIETNAM 3.1 Overview of migration historical in Vietnam .14 3.1.1 Migration in feudal states 14 - 3.1.2 Migration under the French colonial period 15 3.1.3 Migration in the war against US army .16 " 3.1.3 Migration after reunification 1975 .18 3.2 The factors speed up rural to urban migration 20 3.2.1 The pox erty and inequity .20 3.2.2 Population distribution and density .21 3.3 Migration data and tendency 23 a.4 Migration to HCM city 25 3.4.1 The Socio — economic situation of HCM city 25 3.4.2 Overview of migration to HCM city 26 3.4.3 Migrants characteristics to HCMC 27 3.4.3 ]VI ]grants origins 27 3.4.3.2 Educational attainment 28 3.4.3.3 A ge dif-ferentials 29 3.4.3.4 Gender 30 3.4.3.5 Occupational differentials and income 31 J.5 Mjgpjj(jpjj jyjjp;j t5 33 3.3.1 Impacts on urban areas - - - 33 LIST OF TABLES Table 1: Annual average population growth rate of the city (Pc) 26 Table 2: Migration from regions to HCM city 1999 — 2004 28 Table 3: Population rate in school by ages (9«) 29 Table 4: Population structure by age group (9«) .30 Table 5: Migrants gender index by ages 31 Table 6: Distribution of employment of migrants in 2004 by economic sectors .31 Table 7: Monthly average migrant income (VND) in 2004 32 Table 5: Description variables used in the model .43 Table 9: Household characteristics in survey 47 Table 10: Regression result of unrestricted model (7 variables) .48 Table 11: Regression result of restricted model (5 variables) 49 Table 12: Influent levels of variables to household migration probability 50 CHAPTER I INTRODUCTION 1.1 Problem statement: Rural to urban migration is the natural process in economic development in all countries, especially in less development countries Migration is not a consequence of economic development progress, but the economic growth has promoted migrants from rural regions to economic centers and urbanization areas The booming in economic growth in Vietnam for two decades has changed remarkably economic structure The production rate in agriculture has decreased strongly in total GDP, from 27.17 Re in 1995 to 24.379e in 2000 and 21.76 to in 2004' In rural areas, beside traditional agricultural sector, service and industrial production have been expanded Therefore, income rate earnings from farming fields are decreasing in total household income .• However, high natural population growth rate and new jobs created slowly in rural areas have made the pressure on labor force in agriculture Moreover, the productivity in agriculture is still low, agricultural lands are reduced due to demands of development industrial zones, urbanization and environmental pollution caused by industry These factors lead an increasing in working off time and an expanding working pressure in rural areas In this situation, migration is considered an acceptable solution for labor force in rural areas Rural to urban migration has played a very important role in industrialization and urbanization process, migration labor force has met the large labor demand in economic development progress The migration also decreases jobs pressure on jobs in agriculture and contributes poverty reduction by remittances to households On the other hand, an uncontrolled migration progress overloads the urban infrastructure, affects on the social fundamentals and may become a disadvantage factor to economic development progress in urban areas GSO 2005, available at www.gso.gov.vn Being a less development country, Vietnam is still in the initial stage of urbanization, given by about 70fio population still lives in rural areas and • tendency of rural to urban migration will occur strongly in coming years, especially in large city such as HCM city, Ha Noi, Da Nang The thesis also identifies the socio- economic consequences not only to rural but also to urban areas The research is to identify the household characteristics that effect on rural to urban migration in Ouang Ngai province by reviewing the different approaches to migration decision The study also allows us determine which are the main factors affecting on migration decision of household in rural areas 1.2 Research objectives The main objective of this exploratory study is to get a better understanding of rural to urban migration through out the features of households in rural The migration process of any individual in a family are considered as an allocation the jobs amongst members of a household, therefore, in this research •“ individual’s migration is also considered a migratory household Although many previous researches have mentioned about rural to urban migration under the other viewpoints, but almost have focused on migrants’ characteristics and other socio- economic, geographic factors that affects on the migration This research focuses on the households characteristics to migration decisions of members in the family Moreover, this research implicates the policy framework for rural to urban migration Therefore, households in rural regions are main objects in the research and are central units of migration survey More specifically, the study focuses on the following objectives: • To analyze the households characteristics in the rural areas that have influences to migration possibility, and identify what the factors have affected on migration possibility most strongly • • To understand the migrants’ livelihoods in destination places and the features of migration labored force in recent years 53 significant ratio of migrants work in informal sector and they accept simple jobs or heavy works with low incomes as mentioned in chapter 3.5 Besides, migrant remittances to their family are considered as investment capital in rural areas for improvement living standard, innovating production materials for increasing productivities However, the imbalance in migration structure in sex and labor force maybe brings about bad affects on both rural and urban regions in the future The regression result confirms the positive relation between differentials income rural —urban and migration possibility Besides that, educational level of household head has active influence on migration decision of the family members because the family owner’s education reflects the members’ educational background, therefore, a well educational level allows people integrating to new life environment easier, that means higher migration probability The household size is also strongly affects on migration, in terms of limited production resources in rural, the larger household size, the higher migration probability (table 5.3) Although lands is considered as one of the mainly production materials in agriculture, but the research has no impact of average square of production lands on migration probability, it shown that lands is no longer important factor to keep farmers’ life together with their homelands 6.3 Recommendations As discussed above, the main reason of rural to urban migration is economic, therefore, the policies to deal with rural to urban migration issues should based on the economic viewpoints and control of migration process should be taken by the economic measures replacing administrational ones The policies makers not only create a friendly environment for migrants to stay and have stable lives in urban areas, but also set up the effective measures to control the flows of migration rather than to be restricted as current regulations are 54 6.3.1 Recommendation for original authorities Regression results of the model and statistical data state that household • T size has effected strongly to household migration probability Therefore, maintaining the household size by implementing the policies of family panning and reducing birth rate are the first policies In fact, these policies have conducted successfully for more three decades whole country However, in some rural regions, the natural population growth rate is still high, it makes the pressure on new jobs in local and promotes movement waves Keeping a low birth rate is the long-terin process with many obstacles, it is not only for reducing migration but also for economic growth in local Household head’ educational level can be seen as represented for family education level Although educational degree is positive relative with migration probability, but in converse, statistics data states that high educational level can reduce remarkably birth rate Besides that, skilled or educational degree labors are usually movement for finding the jobs, which are not available in local, release the pressure on jobs in local However, the local governments should focus on training vocational schools or practical training courses because the schools can help farmer in reducing the dependence on agricultural income, creating the non-farm works at the local Such as, farmers can expand production and improving their income without migration to urban areas The local authorities also should review the credit policies to create more non-farm jobs in rural, support credits to household farming projects and intensive labor plans, especially unskilled labor in local In fact, the extra income from the household’ small projects have good affects on decreasing number of migrants to urban than any macro strategies implementing by the authorities A very important problem in agricultural production is affected by weather and natural risks, leading to the regular fluctuation in farmers’ income Therefore, the essential small credits can assist farmers overcoming difficulties and reducing migration ware temporarily 55 6.3.2 Recommendation for urban authorities Although • migratory labored force have contributed considerably in economic growth of urban areas, but urban authorities should review the economic strategies based on using labor force the best effectively Is the rational if the cities focus on important industries using skilled technical labors and capital intensive? For labor-intensive industrials, the urban governments should control closely Some people think that the growth of labor-intensive industrials will reduce the unemployment rate in urban But in fact, migratory labor work in these industries contributed a large rate, and most of them are unskilled or low educated labors, their contribution to urban economic growth is very limited 6.4 Limits and suggestion for further studies The surveyed data collected in the thesis covering only two communes in Ouang Ngai province with 102 households, so the sample could not be seen as typical sample represent for 200.000 households in the province Moreover, the surveyed data comes from mainly responses of household heads and the accurate appraisals in the answers are still limited •‘ The further studies should focus on more the average lands square as well as effect in using lands in various communes to identify the effective level of lands to migration decision I think that if the lands factor is analysed in more details and more observation, lands will have impacted on rural to urban migration decision 56 APPENDIX Method: ML - Binary Logit (Quadratic hill climbing) Date: 07/16/07 Time: 08:31 Sample: 102 Included observations: 102 Convergence achieved after iterations Covariance matrix computed using second derivatives Coefficient Std Error z-Statistic Prob SIZE 1.243855 0.381779 3.258048 0.0011 EDU 1.070524 0.498772 2.146321 0.0318 DEPEND -0.002491 0.022286 -0.11177 0.911 HIGHRATE 0.064304 0.0241 2.668179 0.0076 LAND -0.009941 0.026888 -0.369718 0.7116 FARMRATE 0.066885 0.020358 3.285496 0.001 DIFFRATE -0.045997 0.019671 -2.338328 0.0194 C -11.84601 2.99256 -3.958488 0.0001 Variable Mean dependent var 0.54902 S.D dependent var 0.500049 S.E of regression 0.34633 Akaike info criterion 0.887338 Sum squared resid 11.27476 Schwarz criterion 1.093218 Log lkelhood -37.25424 Hannan-Ouinn criter 0.970706 Restr log likelihood -70.21003 Avg log likelihood -0.365238 LR statistic (7 df) 65.91159 McFadden R-squared 0.469389 Probability(LR stat) 9.86E-12 Obs with Dep=0 46 Obs with Dep=1 56 Total obs 102 57 APPENDIX , Dependent Variable: PMIG Method: ML - Binary Logit (Quadratic hill climbing) , Date: 07/16/07 Time: 08:31 Sample: 102 Included observations: 102 Convergence achieved after iterations Prob Covariance matrix computed using second derivatives Variable Std Error z-Statistic SIZE 1.249573 0.372603 3.353635 0.0008 EDU 1.085278 0.487523 2.226104 0.0260 HIGHRATE 0.06495 0.023401 2.775557 0.0055 FARMRATE 0.064594 0.019214 3.361865 0.0008 DIFFRATE -0.049182 0.014495 -3.393085 0.0007 C -11.90912 3.007512 -3.959793 0.0001 Mean dependent var , Coefficient 0.54902 S.D dependent var 0.500049 S.E of regression 0.341929 Akaike info criterion 0.849526 Sum squared resid 11.22386 Schwarz criterion 1.003937 Log likelihood -37.32585 Hannan-Quinn criter 0.912052 Restr log likelihood -70.21003 Avg log likelihood -0.36594 LR statistic (5 df) Probability(LR stat) 65.76836 7.76E-13 McFadden R-squared 0.468369 Obs with Dep=0 46 Obs with Dep=1 56 Total obs 102 58 APPENDIX Because the probabilities of DEPEND and LAND variables which are not statistically significant difference from zero, we formulate the restricted version of the model subject to the joint hypothesis Ho: Of = and Đ = We usã a chi square statistic with two degrees of freedom based on the likelihood ratio, LRLU /2k = - 2ln(LR LUR) = -2(1nLR — lnLUR) = -2(-37.32585 + 37.2542436833) = 0.14322 We have /'0.05, = chiinv(0.05,2) = 5.99 Since y k < x o.05 =» we accept the null hypothesis 59 BANG CAU HOI KHAO SAT QUESTIONNAIRE Hp ten chu ho: H‹›ii.sehc›li1 Ctvmet mime Tinh: Huyen: Pt t›vitice Di.s fI‘it Xa Thfin St N‹› Théng tin vé c:ie thiinh vién hg Infcirmation itf htiusettold members Hp tén Full n‹imc Tuoi Gidi tinh "“ Hpc van F‹1u- fci ’‹/ Khé nfing lao dong - So ngu’f1i tuoi 18 -40 : Nuilihci ‹›J’ pcople iii 78 - 411 ye‹ii‘.s ‹›lil o D3t lira: ngu’di Thu nhap hang nam cua gia dinh tai di.a phifdng dfing Kg, titdng difnng II THONG TIN VE DI Ct1: Migrants’ information) Hi§n tai cd ngif’di nao gia dlnh hi§n dang sinh lam $n sinh song d ndi khdc khting? Thong tin cti nhan ngif’di di cif Kligrcints’ informntit›n Tuoi/ Ages HP:in nhan/ 3fiii i ie‹? Mijc dich/ Pui p‹›scs ( \'NlJ/m‹›nih) d/th:ing ( \/NOT /m‹›nth) Xin chan thltnh c$m dn f›ng (bIi) Tli‹inks for ; ottt respcitidences REFERENCES , ; ,• • • Arjan De Haan and Ben Rogaly “Labor Mobility and Rural Society”, Crown House, London N14 SBP, Englan • Bao, Nguyen Hoang (1995) “Applied Econometrics”, Lecture note and readings, Vietnam —Netherlands Project for MA program in Economics of Development • Bijak, J “Forecasting international theories Selected theories, model,s and methods”, Central European Central for Migration Research, working paper 412006 • Bryant, J (1998), Communism, Poverty, and Demographic Change in North Vietnam Population and Development Review, 24(2): 235269 • Coxhead, I and Diep, Phan “ Internal migration and income convergence during Vietnam’s transition”, University of Wisconsin, 2006 • Dang N.A, Thanh.H.X, Cecilia Tacoli, “ Migration in Vietnam” paper for presentation at the Region Conference on Migration in Dhaka, Bangladesh, 22 — 24 June, 2003 Dang, A., Goldstein, S and McNally, J (1997), Internal Migration and Development in Vietnam International Migration Review, 31(2): 312-337 • Dang, N.A (1999), Market Reforms and Internal Labour Migration in Vietnam Asian and Pacific Migration Journal, 8(3): 381-409 • Dang, Nguyen Anh (2005) "Vietnam internal migration opportunities and challenges for development.” Paper presented at the Regional Conference on Migration and Development in Asia, Lanzhou, China, 14-16 March 2005 • Development Analysis Network (DAN), labor market in Transitional Economies in South East Asia and Thailand, 2001 • Do, M.C (1998), Rural-Rural Spontaneous Migration Problems and Solutions Paper presented at the International Seminar on Internal Migration, Hanoi, 6-8 May 1998 • Doan, M.D., Henaff, N and Trinh, K.T (1998), Patterns of RuralUrban Migration and Solutions to the Problem A Case Study of Hanoi Paper presented at the International Seminar on Internal Migration, Hanoi, 6-8 May 1998 • • Lt, T (1996) “Peasants on the move.’ Rural - Urban migration in the Hanoi region”, Institute of Southeast Asian Studies, Singapore • Harigaya, Tornoko and Alan de Brauw (2004) "Seasonal migration and improving living standards in Vietnam," Working paper • Guest, P (1998), The Dynamics of Internal Migration in Vietnam, UNDP Discussion Paper 1, (Hanoi: UNDP) • GSO, Vietnam Living Standard Survey 2004 • GSO, Vietnam Living Standard Survey 2002 • GSO, Vietnam Population and Housing Survey 1999 • GSO, Vietnam Migration survey 2004 Loan, Le Thi Thanh ”Migration situation to Hochiminh City 1999-2004”, Statistical Department — Hochiminh city • Ranis, G “Arthur Lewis’ Contribution to Development Thinking and Policy” Yale University-2004 • Lee, Everett S 1966 “Atheory of migration” Demography, Vol.3 • Statistical department of Hochiminh City “ Midterm migration survey 2004” • h Todaro and Smith “Economic Development” 8' edition, 2003, Pearson Addison Wesley • Oded Stark “ The migration of labor” Cambridge 1991 • Stiglitz, J.E (2000)”ficoiiomics of the Public Sector” New York, London: W W Norton & Company • Zhang et a1 (2004) “Structure and implications of migration in a transitional economy Beyond the planned and spontaneous dichotomy in Vietnam” The Centre for Social and Economic Research on the Global Environment (CSERGE)-University of East Anglia And University College London ... some factors that affected on rural to urban migration can be extracted from the models as follows: • The main reason of rural to urban migration is economic; the migration rates depend on the differentials... The thesis also identifies the socio- economic consequences not only to rural but also to urban areas The research is to identify the household characteristics that effect on rural to urban migration. .. followed by the current economics viewpoints Therefore, some of migration theories are usually detailed describe to explain the reasons of migration However, the nature of migration and the causes