Luận văn thạc sĩ UEH leaving unemployment of an individual, the impact of unemployed benefits and familys income

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL HO CHI MINH CITY STUDIES VIETNAM THE HAGUE NETHERLANDS VIETNAM – NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS LEAVING UNEMPLOYMENT OF AN INDIVIDUAL: THE IMPACT OF UNEMPLOYED BENEFITS AND FAMILY’S INCOME By LE THI CAM NHUNG MASTER OF ARTS IN DEVELOPMENT ECONOMICS Ho Chi Minh City, December 2015 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT This paper aims to analyze the determinants to affect the probability of having a job after a period of being unemployed of Vietnamese labor by using Vietnam household living standard survey The study covers 1,156 observations by filtering all people in labor age who were unemployed in 2010 to analyze their situation in 2012 Demographic characteristics of each person are focused in order to discover the reasons to help people find a job meanwhile the macroeconomics factors are considered to be unchanged Findings in this research emphasize that income of family, unemployed benefits, money spending for inpatient fee contributed to demotivate people in seeking a job On the contrary, higher education could be helpful for an individual to leave unemployed circumstance Keywords: unemployed people, determinants for having a job, income, education, fee i LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT Foremost, I would like to sincerely thank Dr Pham Thi Bich Ngoc I am grateful to her enthusiastic instruction crucial advice and valuable guidance during the time I worked with this thesis In addition to this, I would like to express my respect and thank Dr.Truong Dang Thuy who gave me very useful advice and comments More special thanks to all professors and staff of Vietnam-Netherlands Program as well as classmate and Vietnam-Netherlands Program alumni Finally, I would like to thank you, my family, who motivated me with the master program and support me to finish this thesis ii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABBREVIATIONS GDP Gross Domestic Product VHLSS Vietnam Household Living Standard Survey Sd Standard deviation Coef Coefficient NBS National Bureau Statistics iii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ABSTRACT i ACKNOWLEDGEMENT ii ABBREVIATIONS iii TABLE OF CONTENTS iv LIST OF TABLES vi LIST OF FIGURES vii CHAPTER 1: INTRODUCTION 1.1 Problem statement 1.2 Research objectives 1.4 Data and methodology 1.5 Thesis structure .3 CHAPTER 2: LITERATURE REVIEW .5 2.1 Some definitions and concepts 2.1.1 Unemployment definition 2.1.2 Type of unemployment 2.1.3 Definition of leaving unemployment 2.2 Literature review 2.2.1 The influence of demographic characteristics on leaving unemployment 2.2.2 The impacts of unemployment benefits 2.2.3 Income and leaving unemployment .10 2.2.4 Health status and being unemployed 11 2.2.5 Summary of empirical researches about leaving unemployment 12 CHAPTER 3: DATA AND METHODOLOGY .15 3.2 Data description 15 3.3 Analytical framework .18 3.4 Econometric model 19 3.4.1 Modeling for probability of leaving unemployment 19 3.4.2 Econometric model in thesis 21 3.5 Data consolidation and list of variables 23 iv LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 4: SUMMARY STATISTICS, EMPIRICAL RESULTS, AND ANALYSIS 27 4.1 Overview of unemployment in Vietnam 27 4.2 Statistics summary 28 4.2.1 Unemployed benefits 28 4.2.2 Expenditure for healthcare 28 4.2.3 Family income .29 4.2.4 Demographic characteristics 30 4.3 Regression and analysis 32 4.3.1 Empirical result 32 4.3.2 T-test for significant statistics variables .38 4.3.3 Descriptive statistics for type of jobs of employed people 40 CHAPTER 5: CONCLUSION AND POLICY IMPLICATION 46 5.1 Some findings 46 5.2 Policy implications .48 5.3 Limitations 49 REFERENCES 50 APPENDICES 54 v LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 3.1: List of variable in unemployed benefits group Table 3.2: List of variables in health status group Table 3.3: List of variables in family income group Table 3.4: List of variable in demographic characteristics group Table 4.1: Summary of unemployed benefit variable in 2012 Table 4.2: Summary of expenditure for healthcare in 2012 Table 4.3: Summary of family income variables in 2012 Table 4.4: Summary of age variable Table 4.5: Determinates of unemployment leaving 2010 and 2012 Table 4.6: the role of partnership, gender, and unemployed benefits Table 4.7: T-test for medical internal fee of 2012 Table 4.8: T-test for income of household in 2010 Table 4.9: T-test for unemployed benefits in 2012 Table 4.10: T-test for income by property in 2012 Table 4.11: Job types of employed individual in 2012 Table 4.12: the average working hour per days of employed people in 2012 Table 4.13: the average working days per months of employed people in 2012 vi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 3.1: The relationship between leaving unemployed and individual’s factors Figure 4.1: Exit rate out of unemployment by gender Figure 4.2: Marital status of unemployed group in 2010 and 2012 Figure 4.3: Marital status of employed group in 2010 and 2012 Figure 4.4: The status of signed labor contract of employed individuals in 2012 Figure 4.5: The status of obtaining unemployment insurance of employed individuals in 2012 vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1: INTRODUCTION 1.1.Problem statement Unemployment has brought a lot of consequences to not only the economy but also the society and individuals (Layard et al, 2005) First of all, a higher payment that this phenomenon can cause to the society is insurance, pension, subsidiary as well as resulting a waste of human resources In addition, gross domestics product might drop because individuals faced with the unemployed situation Secondly, in the situation of jobless and less income, it is easier for an individual to turn to crime to meet financial needs This action could result in an unstable situation and slow development for society (Jensen et al, 2003) Under the pressure of earning money for surviving, people are easier to get the sickness and health problems Furthermore, some people who could not suffer from unstable circumstances and they did wrong behaviors such as suicide or disregarding themselves and lives On the other hand, a good work could make an individual to develop their skills as well as have some money to save for family and their activities, the better job people get, the most satisfied people feel in their lives (Drobnič et all, 2010) Hence, the unemployed situation of an individual could be explored deeply to find a solution to decrease such an issue In addition, time to find a job should be reduced to prevent demotivation for people in the time of waiting According to data from General Statistics office, the unemployment rate of Vietnam is quite low at 1.96 % in 2012, this number increased and reached 2.1% in 2014 Nevertheless, this rise is not critical Although the unemployment rate is low, the rate does not really reflect the overall picture of labor employment because of some following reasons Underemployment is not reflected in the overall unemployment rate (Fields,1975) Besides, that laborers who are on the way to quit the job and find a new one are not mentioned From any point of view, unemployed situation matter for government, economist and each person In the case of Vietnam, during the period from 2009 to 2010, Vietnam had lost half million and one million jobs in 2009, 2010 respectively due to economics slowdown (Cuong, 2010) This event could threaten the development of society as well as living standard of citizens Hence, it is necessary to find out the solutions to reduce the unemployed situation to help employee and family release burden of physical needs Researchers studied on the impacts of economic recession to labor market and LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com REFERENCES Nickell, S (1979) Estimating the probability of leaving unemployment Econometrica: Journal of the Econometric Society, 1249-1266 Kupets, O (2006) Determinants of unemployment duration in Ukraine Journal of Comparative Economics, 34(2), 228-247 Van den Berg, G J., & Van der Klaauw, B (2001) Combining micro and macro unemployment duration data Journal of Econometrics, 102(2), 271-309 Hunt, J (1999) Determinants of non-employment and unemployment durations in East Germany (No w7128) National Bureau of Economic Research Brooks, C., & Volker, P (1986) The Probability of Leaving Unemployment: The Influence of Duration, Destination and Demographics* Economic Record, 62(3), 296-309 Kulik, L (2001) Impact of length of unemployment and age on jobless men and women: A comparative analysis Journal of Employment Counseling, 38(1), 15-27 Hahn, V (2009) Search, unemployment, and age Journal of Economic Dynamics and Control, 33(6), 1361-1378 Narendranathan, W., & Stewart, M B (1993) Modelling the probability of leaving unemployment: competing risks models with flexible base-line hazards Applied Statistics, 63-83 Røed, K., & Nordberg, M (2003) Temporary layoffs and the duration of unemployment Labour Economics, 10(3), 381-398 Ciuca, V A S I L I C A., & Matei, M O N I C A (2010, October) Survival analysis for the unemployment duration In Proceedings of the 5th WSEAS International Conference on Economy and Management Transformation (Vol 1, pp 354-359) Jensen, P., Rosholm, M., & Svarer, M (2003) The response of youth unemployment to benefits, incentives, and sanctions European Journal of Political Economy, 19(2), 301-316 Dolado, J J., & Jimeno, J F (1997) The causes of Spanish unemployment: A structural VAR approach European Economic Review, 41(7), 1281-1307 Nickell, S (1979) Education and lifetime patterns of unemployment The Journal of Political Economy, S117-S131 Franz, W., & König, H (1986) The nature and causes of unemployment in the Federal Republic of Germany since the 1970s: an empirical investigation Economica, S219S244 50 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Jensen, P., Rosholm, M., & Svarer, M (2003) The response of youth unemployment to benefits, incentives, and sanctions European Journal of Political Economy, 19(2), 301-316 Tansel, A., & Tasci, H M (2004) Determinants of unemployment duration for men and women in Turkey Edin, P A (1989) Unemployment duration and competing risks: evidence from Sweden The Scandinavian Journal of Economics, 639-653 Güell, M., & Hu, L (2006) Estimating the probability of leaving unemployment using uncompleted spells from repeated cross-section data Journal of Econometrics, 133(1), 307-341 Arulampalam, W., & Stewart, M B (1995) The determinants of individual unemployment durations in an era of high unemployment The Economic Journal, 321-332 Perry, G L., Hall, R E., Holt, C., & Kaitz, H (1972) Unemployment flows in the 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Journal of Applied Econometrics, 8(4), 361-381 Mincer, J (1991) Education and unemployment (No w3838) National bureau of economic research Stancanelli, E G (1999) Unemployment duration and the duration of entitlement to unemployment benefits: an empirical study for Britain Applied Economics, 31(9), 1043-1051 Jenkins, S P., & García‐Serrano, C (2004) The Relationship between Unemployment Benefits and Re‐employment Probabilities: Evidence from Spain* Oxford Bulletin of Economics and Statistics, 66(2), 239-260 Alba-Ramírez, A., Arranz, J M., & Moz-Bullón, F (2007) Exits from unemployment: recall or new job Labour Economics, 14(5), 788-810 Meyer, B D (1988) Unemployment insurance and unemployment spells (No w2546) National Bureau of Economic Research 51 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Poterba, J M., & Summers, L H (1995) Unemployment benefits and labor market transitions: A multinomial logit model with errors in classification The Review of Economics and Statistics, 207-216 D'Addio, A C., & Rosholm, M (2005) Exits from temporary jobs in Europe: A competing risks analysis Labour Economics, 12(4), 449-468 Bernklev, T., Jahnsen, J., Henriksen, M., Lygren, I., Aadland, E., Sauar, J., & Moum, B (2006) Relationship between sick leave, unemployment, disability, and health‐ related quality of life in patients with inflammatory bowel disease Inflammatory bowel diseases, 12(5), 402-412 Akhavan, S., Bildt, C O., Franzén, E C., & Wamala, S (2004) Health in relation to unemployment and sick leave among immigrants in Sweden from a gender perspective Journal of immigrant health, 6(3), 103-118 Janlert, U (1997) Unemployment as a disease and diseases of the unemployed Scandinavian journal of work, environment & health, 79-83 Schuring, M., Burdorf, L., Kunst, A., & Mackenbach, J (2007) The effects of ill health on entering and maintaining paid employment: evidence in European countries Journal of epidemiology and community health, 61(7), 597-604 van den Berg, T., Schuring, M., Avendano, M., Mackenbach, J., & Burdorf, A (2010) The impact of ill health on exit from paid employment in Europe among older workers Occupational and environmental medicine, 67(12), 845-852 Gordon, D M (1972) Theories of poverty and underemployment Glyde, G P (1977) Underemployment: Definition and causes Journal of Economic Issues, 245-260 Vinokur, A., Caplan, R D., & Williams, C C (1987) Effects of Recent and Past Stress on Mental Health: Coping with Unemployment Among Vietnam Veterans and Nonveterans1 Journal of Applied Social Psychology, 17(8), 710-730 Mortensen, D T (1976) Unemployment insurance and job search decisions Indus & Lab Rel Rev., 30, 505 Layard, P R G., Nickell, S J., & Jackman, R (2005) Unemployment: macroeconomic performance and the labour market Oxford University Press Fields, G S (1975) Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs Journal of development economics, 2(2), 165-187 Drobnič, S., Beham, B., & Präg, P (2010) Good job, good life? Working conditions and quality of life in Europe Social indicators research, 99(2), 205-225 52 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Cuong, N V., Hung, P T., & Tung, P D (2010) Evaluating the impacts of the current economic slowdown on (un) employment in Vietnam (No 01) Kien, T N., & Heo, Y (2009) Impacts of trade liberalization on employment in Vietnam: a system generalized method of moments estimation The Developing Economies, 47(1), 81-103 Zhu, Y (2005) The Asian crisis and the implications for human resource management in Vietnam The International Journal of Human Resource Management, 16(7), 12611276 53 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com APPENDICES Regression results:  Logit regression results with regressors of 2012 54 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Marginal effects of all significant variables in 2012 55 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Logit regression results with regressors of 2010 56 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Marginal effect of all significant variables in 2010 57 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Logit regression results with repressors of 2010 and 2012 58 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Logit regression with all variables in 2012 and interaction: income2012*parnership2012 59 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Logit regression with all regressors in 2012 and interaction: gender*unemployed benefits, 60 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Logit regression with all regressors in 2012 and interactions: partnership*unemployed benefit 61 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Logit regression result with repressors of 2012 and variable to identify region 62 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com T-test result:  T-test for medical internal fee of 2012  T-test for income of household in 2010 63 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  T-test for income of household in 2010  T-test for income by property in 2012 64 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... the unemployment should be improved On the other hand, Franz and König (1986) researched the causes and duration of unemployment in Germany in 1970s, after working, they found that the demand... income they earned for the main work and the second one; income getting from lending money, house and real estate, investing in fund and insurance; income given by another individual and organization... partnership and unemployed benefits were the key impact of leaving unemployment in term of statistic as well as the economy The relationships of them with unemployment were in the right track with the