Problem statement
Over the last two decades, Vietnam has achieved significant economic growth and effectively reduced poverty, which has led to notable changes in population distribution and mobility.
The economic reforms initiated in 1986 significantly impacted migration in Vietnam through three key avenues Firstly, changes in agriculture and the implementation of the household contract system liberated farmers from their land 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 sectors and services.
The migration from rural to urban areas has significantly influenced the urbanization process in Vietnam, leading to structural population shifts among regions This transition has facilitated labor market adjustments, moving workers from agriculture to the manufacturing and services sectors, which are essential for 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 among 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 24.10% of total registered capital, according to the Ministry of Planning and Investment.
This thesis explores the concept of relational migration and its connection to urban unemployment in Ho Chi Minh City It examines whether local government intervention is necessary to attract high-skilled migrants and what policies could effectively reduce urban unemployment By identifying the determinants of migration's impact on unemployment, the research employs instrumental variables and cross-section data techniques to analyze the situation comprehensively.
The research objective of the thesis .1 1 1.3 Main hypothesis to be tested
This article examines the dynamics of urban employment in Ho Chi Minh City, highlighting the economic behaviors driving rural-to-urban migration and the key factors contributing to urban unemployment It also proposes alternative policy designs aimed at mitigating urban unemployment, addressing critical issues related to these challenges.
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?
1.3 MAIN HYPOTHESIS TO BE TESTED
This study aims to explore the relationship between migration and unemployment in urban areas, focusing on the opportunities and challenges that significant migration presents for a country's development and the employment landscape for both migrants and non-migrants.
Individuals often relocate to areas with higher wages to maximize their income, driven primarily by wage differentials that arise from geographical variations in demand and supply within urban labor markets This relationship highlights how migration patterns are influenced by the potential for better earnings at the destination.
The relationship between migration and unemployment in urban areas is examined through the lens of the human capital model, focusing on whether being a migrant uniquely influences the likelihood of unemployment.
The scope and limitation of the thesis
The limitation of the thesis
This thesis focuses on examining the relationship between migration and wage levels, as well as the likelihood of unemployment, specifically comparing migrants and non-migrants in Ho Chi Minh City It does not seek to present a comprehensive overview of the social, economic, and health conditions of migrants in the city.
The 2004 Vietnam Migration Survey was a micro-level study aimed at understanding migration patterns in key destinations across the country, including rural areas, industrial zones, and large cities Its primary goal was to enhance knowledge about migration outcomes within Vietnam, focusing on the decision-making processes and results associated with migration The findings of this survey provide valuable insights into the migration dynamics of Ho Chi Minh City and other significant regions.
City, will be analysis and evaluate.
Methodology
The thesis method used is mainly quantitative combining both descriptive and regression analysis.
The descriptive statistical method is employed to analyze the relevant database, followed by the estimation of an econometric model to explore the relationship between dependent and independent variables This relationship is assessed using primary data collected by 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 data on respondents' backgrounds, migration histories, details of their most recent moves, current living conditions, health status, and issues related to STIs, AIDS, and family planning among 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 Viet Nam, the case of Ho Chi Minh City
Chapter 5: Econometric analysis and Results
Chapter 6: Conclusion and Policy implications
LITERATURE REVIEW 2.1.MIGRATION AND FACTORS AFFECT ON MIGRATION.
Migration is a significant socio-economic phenomenon experienced globally, encompassing various forms of residential change from one location to another It arises from shifts in economic, cultural, and political structures, leading to substantial alterations in social dynamics Defined primarily as a demographic process, migration involves changes in residential areas across geographic or administrative boundaries This transformative act impacts both migrants and the communities they leave and join Additionally, migration's demographic and historical aspects highlight its effects on institutions like marriage and family Factors influencing migration decisions include individual characteristics such as age, sex, and education, which can either encourage or discourage the desire to migrate.
Migration to urban areas in developing countries often leads to challenges such as employment issues, environmental degradation, and housing shortages The primary objective is to mitigate the negative impacts of this urbanization process while facilitating a smoother transition As migration and urbanization are integral to modernization, they inevitably bring about various mistakes and difficulties Consequently, numerous settlements have emerged and continue to develop in and around urban centers due to this migration trend.
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 He argued that push factors, like poverty, unemployment, and land shortages in rural areas, often drive farmers to leave their homeland in search of better opportunities Conversely, pull factors refer to the attractive job and income prospects available in urban areas, compelling individuals to migrate and settle in cities for improved livelihoods.
Larson and Mundlak (1997) argue that rural to urban migration positively impacts remaining agricultural workers by increasing their income due to the same output being produced with fewer laborers This rise in household income helps to narrow the rural-urban income gap, thereby reducing the incentive for further migration Additionally, the rural sector benefits from remittances sent by migrants, with Williamson (1988) noting 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 rural and urban migration This migration process subsequently impacts sectoral and geographic economic activities, alters income distribution, and affects population growth.
In Vietnam, rural-urban migration is driven by individuals leaving the countryside in search of better social and economic opportunities in cities and towns The instability and prolonged downturns in agricultural prices, compounded by global integration, make it increasingly challenging for rural residents to sustain their livelihoods on small farms Consequently, migrating to urban areas has become a common aspiration, particularly among non-farm individuals and youth who seek greater job prospects Despite the challenges of crowded living conditions and demanding work hours, these migrants often achieve 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 that vary across and within 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 is shaped by both the conditions of the origin and destination, with household and community-level factors playing a crucial role These factors impact income-earning opportunities for household members, influenced by the quality and availability of land or business prospects within their community.
Internal factors (Market, price, trade/capital flows)
(Economics, environment, demographic, socio — economic, infrastructure)
Local community Conditions in possible areas of destitution
Individual/household characteristics (Age, education, marital status, previous migration, work experience of member, family size/composition, land/assets, migration network)
Adapted to Richard E Bilsborrow, Migration, population change, and the rural environment, p78, ECSP report, Issue 8, 2002
Conditions in area of original
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 agricultural practices have led to increased rural-to-urban migration While this movement can strain urban job markets, resulting in higher unemployment if cities cannot accommodate all migrants, many companies prefer hiring migrant labor due to their lower wage expectations Additionally, destination areas may experience economic benefits from the influx of rural migrants, highlighting the complex effects of migration on urban economies.
• from rural to urban migration, when rural migrants do unpleasant jobs, contribute to economic growth and as consumers in the urban economy.
2.2 MIGRATION AND URBAN UNEMPLOYMENT IN DEVELOPING
In developing countries, rural poverty characterized by low agricultural incomes, low productivity, and underemployment is driving many migrants to seek better employment opportunities in urban areas Recent studies indicate a rise in unemployment within the rural sector, further exacerbating the income disparity between rural and urban populations.
The increasing population pressure, characterized by higher people-to-land ratios, is often linked to rising poverty and rural out-migration With current technology, only a limited portion of the labor force can be accommodated in agriculture, and as technology progresses, the demand for rural labor may decline, exacerbating unemployment Consequently, more individuals are compelled to migrate to urban areas in search of job opportunities unless significant advancements in agricultural practices and rural systems occur However, population pressure is not the sole or primary factor contributing to the growing unemployment and poverty in rural areas; equally significant are the low investment rates in agriculture, fragmented land ownership, and unequal distribution of land and productive assets Additionally, much of the agricultural technology utilized is imported from labor-scarce countries, which prioritizes capital over labor.
Overpopulation in developing countries, particularly in Asia and Africa, combined with high fertility rates, has led to a growing number of landless and near-landless individuals This ongoing fragmentation of land is driving many peasants to migrate to urban areas in search of non-agricultural employment opportunities.
Rural-urban migration is driven by various factors, particularly affecting the very poor and those from rural middle and upper classes with limited education and awareness of urban opportunities Many migrants seek to further their education, while others leave due to dissatisfaction with rural life prospects.
The rapid development of industrial infrastructure in post-independence cities of developing countries has spurred migration from rural areas by creating job opportunities Governments have historically prioritized investment in public and social services in urban centers, particularly in major cities, while largely neglecting rural regions.
In many developing countries, rural migrants are increasingly drawn to primate cities, where a concentration of services, industrial zones, and cultural opportunities exist The advancement of transportation systems has significantly lessened the impact of distance as a barrier to migration Improved transportation and communication not only lower migration costs but also bridge the cultural gap between origin and destination areas, facilitating the migration process.