INTRODUCTION
Problem Statement
There are many studies about human capital and social capital alone on different status attainments such as economics, education, environmental, and many other things with different levels of impact on individual, firm, organization, and society instead of the combination between them Many researchers argue that the relationship between human capital and social capital are substitution (Piazza-Georgi 2002) The other side argues that it has the complementary relationship (Bruderl and Preisendorfer 1998)
In the current market economy in Vietnam, education is the driven factor to increase knowledge and competency Human capital is the key factor to increase value such as wages, competencies, and productivity not only for individual but also for firm and society as a whole (Denison, 1962; Schultz, 1961) The study of Grayson in 2004 found that human capital had the positive contribution to income of university graduate in Canada Government has recently attracted many multi-nation companies to invest in Vietnam so the demand of economy is increasing the demand for employee with a certain form human capital to meet the requirements of the competitive business environment 'The knowledge, skills and competencies and other attributes embodied in individuals that are relevant to economic activity' is the definition of human capital (OECD, 1998)
With the context of my study, the human capital is captured by English proficiency, computer skills, and communication skills (Santarelli and Hien,
On the other hand, many studies investigate the effect of social capital on the many desirable outcomes of individual, household, and firm level The study of Yandan Wang examined the effect of social capital on job outcome of university graduate by using the NELS – National Education Longitudinal Study in 2008
The study emphasized how importance of the university environment to build up the social capital that had the positive relationship with job outcome for university graduates The study carried out by Nguyen Van Ha to see the impact of social capital on the household welfare in paper-recycling craft village in Vietnam in 2004 The other study of Ha Anh Tuan carried out to examine the impact of social capital on individual income in Ho Chi Minh City We rarely see many researches to combine the human capital and social capital impact on one desirable outcome, especially for the level of individual.
Research Objective
With the above in mind, I am going to investigate the impact of combination between human capital and social capital on the income of university graduate in
Ho Chi Minh City In the transition period of university graduate, the family and school (Yadan Wang, 2008) generate the social network Human capital accumulates through learning during university period The message from my study can give to students, educators, and educational policy makers about the effect of social capital, and human capital on income.
Research Question
The major relationships investigated in this study are:
Research question 1: Does the investment of individual for the human capital bring the positive relationship to income?
Research question 2: Does the current social capital and cumulative social capital during university period have the positive impact on income of university graduate in Ho Chi Minh City?
Research Methodology
My study uses the survey data of university graduate in Ho Chi Minh City with the samples size is 252 The combinations of three method of survey are face-to- face interview, drop off, and email The econometric method employed is OLS (Ordinary Least Square) with robust standard errors
The major independent variables in the proposed model are cumulative social capital during university (extra-curricular activity, voluntary service work, and social connection), current social capital, and Home base social capital represented by Social Economic Status (parent education level); Human capitals which measured by English skills, communication skills, and computer skills
The result of this study aims many readers First, student can use this as a preference for good preparation for the transition period Second, educators and educational policy makers can use this to have the good design program for student during university to achieve the desirable human and social capital.
LITERATURE REVIEW
Social capital and status attainment theory
Bourdieu (1986) defines social capital as “the aggregate of the actual or potential resources which are linked to possessions of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition.” He focused on the social capital with relationships such as family, schooling, and workplace environment He states that social capital involves “transforming contingent relations, such as those of neighborhood, the workplace, or even kinship, into relationships that are at once necessary and elective, implying durable obligations subjectively felt (feelings of gratitude, respect, friendship, etc.)” (1983)
Three form of social capital are obligations and expectations, relational networks, and social trust and norms (Coleman, 1990) The social capital can help individual to obtain their objective and mission through the social relationship and network of social tie The study of Coleman, which carried out in 1988 to examined the relationship between the social capital and education achievement by using the series of National Educational Longitudinal Study He refers social capital to social relationships that can help individual to accomplish a task or achieve a goal Social capital can contribute and promote the learning of individual and adapt to society and its norms
Putman (2000) defines social capital “While physical capital refers to physical objects and human capital refers to properties of individuals, social capital refers to connections among individuals - social networks and the norms of reciprocity and trustworthiness that arise from them” According to Putman, There are two type of social capital First, bonding social capital refers to inward relationship such as within family, group of friend, or ethnic group Second, Bridging social capital relates to outward relationship among different groups
Most of the studies have focused on how human capital impact on the job attaining process Because the status attainment theory believes that, the education achievement such as knowledge and skills is the core factors to have the competitive advantage to obtain and get a better job (Becker, 1975; Mincer,
Status attainment theory states that the level of education achieved of one person affected by social status of parent According to Featherman & Carter (1976) and Jencks (1979), the status attainment theory has a high correlation with parent's occupations, levels of education, and incomes The level of education in turn affects the occupation status and income of children
There are not many researches and literature mention about the effect of cumulative social capital during university period to income The connection, extra-curricular activity, and other activity that created during university period play an important role in occupational status of individual The social capital that created during university might affect occupation of individual in many ways
Student might get the first job through connection or university network, and this job may be a direction for occupation career of individual, which might directly affect income On the other side, the argument of Buerkle and Guseva (2002) said that the cumulated social capital during university had independent effect on income of individual
Buerkle and Guseva (2002) states that the social capital gained in the university has the effect on individual’s income, and this effect varies by individual’s education and experience levels The reason that social capital in university is of special interest for occupational success is that it is closely tailored to the student’s career interests and aspirations Conceptualizing the university experience is an important source of social capital
Lin (1999) carried out the research to examine the relationship between social capital and status attainment The research had two processes The first process focused on how people access to social capital available in a general social networks, such as a person’s education background, prior experiences The second process involved the use of social contact and resources provided by the contact in the job-search process such as network resources, education, and initial position These factors expected to affect attained status like occupational status, earnings …
Human capital and status attainment theory
With the challenges of the current knowledge economy, many countries in general and individual always want to seek the new way to improve and maintain competitive advantages In the context of Viet Nam, the success of individual largely depends on level of competencies In the end, people are becoming valuable assets and recognized within a framework of human capital
Generally, the human capital is the combination of two words with different meaning In the economic perspective, the human is the subject to take charge of all economic activities such as production, consumption, and transaction The capital refers to ‘factors of production used to create goods or services that are not themselves significantly consumed in the production process’ (Boldizzoni,
2008) On the creation of these concepts, human capital means one of production elements, which can generate benefits through inputting it
There are many studies show that human capital influences many desirable outcomes Many economists show that investment in human capital brings the high individual’s wage compared with other input such as land, labor force, and financial capital (Salamon, 1991) The investment of the knowledge and skills of individual is easy to turn into goods and services (Romer, 1990) Human capital, such as knowledge and skills, which can improved through learning process
According to Sleezer, Conti, and Nolan (2003), learning is the key factor and important component to acquire human capital and enhance the relationship with other through learning process In the micro perspective, human capital is the key factor for firm’s competence and comparative advantage (Lepak & Snell (1999)
In the macro perspective, Dension (1962) and Schultz (1961) say that human capital largely affects wage of individual, productivity of firm, and the economy of nation Schultz (1961) stated that human capital plays an important role in the growth of an economy
Investment of human capital is not only productivity alone but also other thing
Attaining learning activity, the learner is easily to apply for the job-seeking activity After employed, people are also easily control and organize their job activity, workplace, and quick adaptation of working condition to receive high reward from current firm and labor market
We can understand that knowledge and skills are the concept of human capital that can acquire through the learning activity Skills, knowledge, competencies, and experience can consider as the factor of human capital
The first point of view of human capital is from individual aspect, human capital is a property against labor force in the classical aspect (Schultz, 1961)
Researchers show that the human capital can closely link to knowledge, skills, education, and abilities (Garavan, 2001; Youndt, 2004) Human capital is conceptualized ‘knowledge, competency, attitude and behavior embedded in an individual’ Rastogi (2002)
The second point of view of human capital is the accumulative process that people obtain the knowledge and skill throughout the learning activity such as university, college, vocational education (Alan, 2008) In the other way of saying, human capital acquires knowledge and skills through experience
The third point of view of human capital is the production-oriented perspective
The definition of human capital is “an amalgam of factors such as education, experience, training, intelligence, energy, work habits, trustworthiness, and initiative that affect the value of a worker's marginal product” (Frank and Bemanke 2007) The definition of Romer (1990) is “a fundamental source of economic productivity’ The definition of OECD (2001) human capital is ‘the knowledge, skills, competencies and attributes in individuals that facilitate the creation of personal, social and economic well-being”
Definition from OECD (1998), Human capital defines as 'the knowledge, skills and competencies and other attributes embodied in individuals that are relevant to economic activity' The job market has the demand that university graduate for many skills In the knowledge economy, the increasing demand for highly educated with communication, self-management, adaptation skills,… and especially English skills, computer skills, and communication skills in the context of Vietnam where is the interest destination for multinational companies are the core factors
The research of Becker in 1975 and Mincer 1974 give a high attention to how important of human capital, knowledge and skills, affect the job obtaining process base on the theory of status attainment to get a better job in the job market According to Featherman & Carter (1976) and Jencks (1979), “the status attainment specially acknowledges that the job status of a person is a function of skills and knowledge of individual, parent education, education attainment of individual income, and occupation of parent”
Since the late 1970s, there are many research diagnose the relationship between income and language proficiency Most of studies carried out in developed countries where the destination of immigrants is Chiswick and Miller (1995,
2002), Bellante and Kogut (1998) examine the relationship of English proficiency of immigrants and income in United State The same study carried out in United Kingdom by Shields and Wheatley Price (2002) We can see that most of study has just focused on the fluency of destination language on earning of immigrant
In the context of developing country where does not the destination of immigrants The native language is very diversification and it cannot conduct for the business language The earning of indigenous population cannot evaluate by the fluency of native language but dominant language in business especially English proficiency Research explore in developing country is the relationship of dominant language in business and income among indigenous population
Measurement of human capital
The measurement of human capital has categorized into three ways: Income approach, output approach, and cost approach Income approach is the wage or benefit of individual obtained by education or training investment Output approach is something such as level of knowledge obtaining, the year of schooling The Cost approach prefer to the cost paid for getting knowledge or certificate
Income approach is the returns, income or benefit, which an individual obtains from labor market through education investment Mulligan & Sala-i-Martin
(1995) defines that aggregate human capital is the sum of quality adjustment of each individual’s labor force, and presents the stock of human capital utilizing an individual’s income
Output approach can be measured the human capital by “schooling enrollment rate”, education attainment, or the production output Psacharopoulos (1984) suggested the average years of schooling to measure the stock of human capital
They refer that the average years of schooling is meaningful to measure the stock of human capital as a proxy Barro (1991) and Barro and Lee (1993) measure the stock of human capital utilizing ‘school enrollment rates’ as a proxy of human capital Nehru, Swanson, & Dubey (1993) measure relationship between human capital and students’ ‘accumulated years of schooling’ in the employable age as educational attainment
Cost approach is the accumulated cost to investing for one’s human capital
Jorgenson & Fraumeni (1989) present the discounted income in the future The stock of human capital uses indirectly to measure for this approach The investment cost of individual uses to measure in the study of Kendric in 1976
Chiswick and Miller (1995) utilize Language proficiency is the important factor of human capital In Vietnam, the current open economy where the destination of many multinational companies is, English skills widely believe that is the important factors in the competitive labor market for university graduate There is almost no empirical research on the returns of earning with different levels of English skill in Vietnam and relationship with other educational outcome as well as social capital
The research of Casale and Posel (2010) found that the large return among Africans who English skills are good The English skills use in the research is reading and writing skills Their research uses the NISD database (National Income Dynamics Survey) The survey conducted in 2008 The question is how well they could speak and write English together with indigenous language The answer ranged into 4 scales “very well”, “fair”, “not well” and “not at all”
Computer skill is another form of human capital According to the study of Sakellariou and Patrinos (2004) in Vietnam, the earning of individual with computer skills is 10-14% higher than individual who do not Sakellariou and Patrinos confirmed again this with the later study The study used the instrumental variable approach The university graduate was asked to measure their computer skill It ranged into four scales (low, intermediate, high and very high) In the other research of Choi (1993) in Korea, The earning of worker was higher with computer skills in the industries with rapid change in technology than industries with slow change in technology The study of Sakellariou and Patrinos (2004) showed that there was a positive relationship between education outcome and computer skills in Singapore.
Measurement of social capital
Home based social capital Social Economic Status:
The accumulation process of social capital believed that when students and parents engage in day-to-day educational activities, and as parents provide resources for better educational development Parents also bring resources for the overall development of their children
Socioeconomic status (SES) is an economic and sociological combined total measure of a person's work experience and of an individual's or family’s economic and social position in relation to others, based on income, education, and occupation In the context of this study, parent’s education is as a form of social capital that affects to children education outcome measured by earning
Parent with good and high education will give more support and involvement to children education activity Parents who are more involvement and support of their children are likely to build up social capital within the family (Coleman,
1988) This type of social capital provides young students with the resources that may have an impact on students’ behavior at university attainment and university performances Coleman (1988) viewed social capital as the outcome of relationships between parents and children
Crosnoe (2004) found that emotionally distant relationships with parents were associated with declining academic achievement Some studies also examined the relationship between social capital within family and years of schooling
Some earlier studies have found a positive relationship between socioeconomic status of family and education result of the children
Social Capital in College Extra-curricular activities:
Extra-curricular activities are activities performed by students that fall outside the realm of the normal curriculum of school education Such activities are generally voluntary as opposed to mandatory, tend to be athletics, social and philanthropic as opposed to scholastic, and usually involve others of the same age (Robert S Rubin, 2003) Another way of saying, on university campuses, extra-curricular involvement is a key tool in personal development The majority of university students, involvement in extra-curricular activities, play an integral role in the college experience “Students involve in extra-curricular activities is not only for entertainment, social, and enjoyment purposes, but most important, gain and improve skills”
(http://education.stateuniversity.com/pages/1855/College-Extracurricular- Activities.html) These activities create environment for student to meet and interact with other people beside their friends This might help them to expand their social network and diversify their relationship Students can learn and exchange information effectively beside what they learn in the classroom
Extracurricular activity is the good way for the student to develop relationship with other people with different backgrounds and different characteristics, which is the important part of social capital Besides that, it also help student improve the skill how to work together That will lead to better learning outcome and job outcome later on Brehm & Rahn (1997) said that Extra-curricular activities is
“web of cooperative relationships between citizens”
In my study, participation in extracurricular activities help individual enhances the social network and relationship in both university and communities So it can be considering as a factor of social capital For example, through participating English club student not only improve their English skill but also make friend with many people with many different backgrounds
There are many studies demonstrated a linkage between student’s participation in extra-curricular activities and their academic proficiency and other outcomes In a study of students’ extra-curricular involvement, Rombokas (1995) have examined if the degree of participation in extracurricular activities affected college academic performance and have found the positive relationship with job outcome Guest and Schneider (2003) found that involvement in extracurricular activities, such as sports Eccles (2003) pays attention to the influence of extra- curricular activity on issues such as academic achievement, personality and social behavior
There are some studies show that peer relationships play an important role in the development of student’s social behavior and school performance Peer relationships in school have studied by many researches Nichol & White (2001) found that peer relationship was an important factor affect to student’s development The empirical study of Berndt & Keefe (1995) and Wentzel &
Caldwell (1997) showed that the positive relationship between academic accomplishments and having a friend Friendship has strong impact on student’s general levels of involvement in school and time spent on academic pursuit (Berndt & Keefe, 1995) The supportive evidence for the positive influence for academic achievement of algebra and student peer group (Nichols and White,
2001) Nichols and White (2001) pointed out that it needs to understand peer group context as an important factor in student’s social behavior and academic performance In sum, these various studies have supported that peer relationships can be an important social resource for students A good peer relationship can motivate and encourage students to be more engaged in positive behaviors Peer relationship is considering as a source of social capital During university time, students spend most of their time with peers It is not surprising that peers have the important role of student’s lives and influence each other’s behavior and opinion The influence of peers is of critical importance in their life and the opinions of peers sometimes can even carry more weight than parents’ opinions
The teacher – student relationship considers as another form of social capital
This relationship has the effect to many outcome of student
There are many factors affect to teacher – student relationship such as student demographic variables, academic orientations, and behavioral orientations (Murray and Greenberg, 2000) The author found that above variables have the significant effects to teacher – student relationship Birch & Ladd (1997) found that individual student characteristics, behaviors and academic performance also affect to teacher –student relationship With the logical thinking, positive relationship between teacher and student can bring to positive academic performance for student Student feels more comfortable and easy to talk to teacher with challenges and improve learning such as asking questions in class and persisting with solving difficult matters in learning The study of Birch &
Ladd also showed that student worked hard with the close concern from teacher that would lead to better academic performance More specifically, students who come to school with poor social skills would benefit more from more personal teacher - student relationships.
Relationship between human capital and social capital
Regarding the relationship between social capital and human capital, Coleman
(1998) emphasizes the role of social capital in the creation of human capital In contrast, other researchers argue the causal chain should be reversed, for instance, social capital can be an unintended by-product of the constitution of the human capital (Buerkle & Guseva, 2002)
Many authors have studied the effects of human capital and social capital on various outcomes, usually focusing on either human capital alone (Cooper, 1994;
Van Praag and Cramer, 2001) or social capital alone (Yoon, 1991; Bates, 1994;
Pennings, 1998) rather than their combination Some scholars argue that they are substitutes, and others see them as complements It is hard for individual to invest in both human capital and social capital at the same time According to Bruderl and Preisendorfer (1998), “social capital compensates for shortcomings in human capital” Otherwise, Piazza-Georgi (2002) states that “investment in human capital leads to a loss in social capital”
The study of Knack and Keefer (1997) showed that the social capital brings higher returns to society than human capital One of the main drivers of economic growth is the interaction between human capital and human capital (Barro and Sala-i-Martin, 1995)
The study of Pennings in 1998 found that the human capital and social capital strongly predicts the failure of accounting firm in Dutch The potentials’ ties to potential clients represented for social capital Human capital represented by industry experience of firm, education level, and firm tenure
For individual, the study of Davidsson and Honig in 2003 found that the opportunity discovery and exploitation is the result of the effect of human capital and social capital Their study used the longitudinal data for Swedish There are two findings in their study (i) The success of exploitation highly associated with social capital, and (ii) Entrepreneurial discovery is strongly predicted by human capital
Investment in human capital and social capital improve the firm’s performance in Dutch (Bosma and Van Praag; 2004) The firm’s performance captured by profits, survival, and generated employment Their study uses the data from Dutch entrepreneurs
Coleman (1988) states that human capital and social capital has the complementary relationship The social capital in community and family can help individual promote human capital “Social capital is the contextual complement to human capital’’ (Burt; 2001) On the other hand, other researchers state that human capital and social capital has the substitution effect such as Bruderl & Preisendorfer (1998) and Piazza- Georgi (2002)
Introduction
The purpose of my study examines the relationships among various variables of university graduate such as accumulative social capital, human capital and job outcome which measured by income, developed from research literature The most important relationship in the proposed model is: 1) Human capital such as 1.1) English proficiency, 1.2) Computer skills, 1.3) Communication skills 2) Social capital such as 2.1) Social Economic Status, 2.2) Friend connection, 2.3) Extra-curricular activity at university, 2.4) Peer relationship, 2.5) Teacher and student relationship, and 2.6) the university impact This chapter presents the research methodology for the study This chapter also describes the data sources, sample and the models The chapter starts with a description data collection, and then continues with explanation of the instrumentation, model and measures, measurement model, hypotheses and the procedures that used to test the model.
Data collection
The data is collected by using the personal network which the set of constructed questionnaires The survey has done with Vietnamese questionnaires with three ways of survey: 1) First, face to face format with accounted for 10% of the sample, 2) Second, 40% of sample size carried out through email, 3) Third, the rest of 50% did by drop off survey Out of 290 questionnaires that are administered, 252 met the requirement that within three year of graduation
The questionnaire has three sections The first section records general information of individual The second section deals with human capital, and it includes questions regarding the learning outcome of individual such as English proficiency, computer skills, and communication skills The final section includes questions to measure social capital such as social economic status, friend connection, and accumulative social capital at university such as extra – curricular activity, peer relationship, teacher and student relationship, and the university impact to individual.
The empirical model
To capture the causal effect of human capital and social capital variables on the outcome of individual that income or wage in survey used as the dependent variable OLS with robust standard errors uses to estimate this relationship
Human capital determinants include English proficiency, computer skills, and communication skills Researchers claim that bias is likely to occur if OLS adopted This is because there may be unobserved individual characteristics, such as ability and motivation, that affect the schooling level attained and the subsequent learning outcome However, most empirical research studies the effect of endogenous education in wage/income equations, in which different educational level or number of schooling years taken as the main input to explain individual return in terms of wages and incomes In such cases, important unobservable factors such as ability and motivation will bias the estimation and give misleading results In my study, the effects of learning outcome of individual achieved which I expect to exhibit a positive relationship with income or wage of individual, under the assumption that other control variables to account for different individual characteristics may offset the endogenous educational bias
Figure one show the simplified general model, which tested in this research A general model can help us has better understand the ways in which social capital and human capital affects the income An extension of this model, which includes the possibilities that factors human capital and social capital, could eventually have an effect on income The human capital constructing in the model are English proficiency, computer skills, and communication skills The social capital constructs in model is social economic status, friend connection, and accumulative social capital at university: extra – curricular activity, peer relationship, teacher and student relationship, and the university impact on income of individual
Human capital is the accumulative process that people obtain the knowledge and skill throughout the learning activity such as university, college, vocational education (Alan, 2008) English proficiency, computer skills, and communication skills evaluated through asking individual The answer has five options and coded from 1 to 5 where 1 means beginning level or and 5 means excellent level in term of meeting the job requirement
Social capital measures as home based capital, friend connection, and accumulative social capital at university such as extra – curricular activity, peer relationship, teacher and student relationship, and the university impact to individual
Home based capital measures by socio-economic status (SES): The socio- economic status measures by education levels of parent The question uses to measure this is “Year of schooling of parent” The answer ranged from 1 to 5 where 5 means above university level, 4, 3, 2, and 1 means university level, vocational and college level, high school level, and other, which means below high school level
Friend connection presents by the number of friends which individual believe that friends can give the support during difficult time The question is “How many friend do you think they will have you when you meet difficulty” The answer ranges from 1 to 5 together with only 1, 2, 3, 4 friends and 5 and above
Figure 2: Measurement of Friend connection
Extracurricular activities: These extracurricular activities include attending sports, music club, joining the green summer volunteer campaign, English clubs… The question is “How often did you attaint these activities at university?”
The respond option has ranged from 5 to 1 where 5 are always and the frequency gradually reduces to 1, which means never
Figure 3: Measurement of Extra-curricular activity
Peer relationship: Peer relationship in university which measured by the following questions: “Choose the answer that is best for you.” 1) Among friends, how important to get good grades; 2) Among your friends, how important of playing sport; 3) Among friends, how important to get together with friend The
Participation in community volunteer work
Friend connection Number of friend
Time for those relationships answer has 5 options ranged from 5 to 1where 5 is very the most important and 1 is not important at all
Figure 4: Measurement of Peer relationship
Teacher and student relationship: Teacher-student relationship in university measures by the following questions: “How much do you agree with each of the following statements about your school and teachers?” 1) Teachers are interested in students; 2) Students are graded fairly in school, 3) There is cheating in school;
4) Teachers ignore cheating The answer has five options ranged from 1 meaning not agree at all to 5 indicating strongly agree
Impt to have good grade
Figure 5: Measurement of Teacher student relationship
The impact of university on job outcome: It represented by for variables on this factor Individual asked whether university education has positive impact on the performance at work 1) Do you think your study at university would bring you a better job? 2) Do you think your study at university would bring you higher salary? 3) Do you think your study at university would bring you higher responsibility? 4) Do you think your study at university would bring you a better opportunity to get promotion? The answer has five option and ranged from 1 meaning not agree at all to 5 indicating strongly agree
Teachers are interested in students
There is cheating in college
Figure 6: Measurement of University impact
Job outcome measures by income The question is “how much do you earn a month with your main job?” Responses are reverse coded, with 1 meaning the earning is less than 4 million VND, 2 meaning the earning from 4 to 5.6 million VND, 3 meaning from 5.6 to 7.2 million VND, 4 and 5 meaning from 7.2 – 8.8 million VND and above 8.8 million VND
The model of Grootaert (1999), Grootaert and Narayan (1999), and Grootaertand Swamy (2002) used human capital and social capital as the input of private good and income as outcome of model In my study, I employ the same model as below
Where Y is income or wage H is human capital S is social capital C is characteristic of individual
From the function (1), it can be made model specification by the regression econometric model with ordinary least square technique
Y = β0 + β1Eng + β2Comp + β3ComSki + β4PareEdu + β5Frie + β6FrieMeet + β7ECA1 + β8ECA2 + β9PeerEdu + β10PeerPopu1 + β11Peerpopu2 + β12TeachStu1 + β13TeachStu2 + β14TeachStu3 + β14TeachStu4 + β15ImpStu1 + β16ImpStu2 + β17ImpStu3 + β18ImpStu4 + ei
Where: Y – Income: Monthly income or wage in VND
ECA – Extra-curricular activity PeerPopu - Peer relationship TeachStu - Teacher and student relationship ImpStu - Important of study
Dependent variable Y - Income: This is the amount that an individual get a month from their main job It measures by millions of VND Responses are reverse coded, with 1 meaning the earning is less than 4 million VND, 2 meaning the earning from 4 to 5.6 million VND, 3 meaning from 5.6 to 7.2 million VND,
4 and 5 meaning from 7.2 – 8.8 million VND and above 8.8 million VND
English proficiency (Eng) is the level of English skill, which can meet the job requirement The responder is asked, “What is your English proficiency to meet your job requirement?” The answer will be coded from 1 to 5 which 5 is excellent level, 4, 3, 2, 1 are consistent with good, intermediate, between intermediate and beginning level, and beginning level
Descriptive Statistics
Table 1 displays the descriptive statistics for each variable in the proposed model
Here, I describe the dependent variable as well as the key independent variables
These descriptive statistics have reflected the key characteristics of the sampled population
Table2: Summary statistics of independent and dependent variables
Kurtosis -0.47 0.18 0.68 -1.3 -1.4 0.89 1.68 0.39 0.78 0.39 -0.23 0.08 -0.37 -0.68 0.92 -0.29 -0.5 -0.64 -0.19 -1.50 Skewness -0.07 0.15 0.09 0.32 -0.1 0.75 1.12 -0.42 -0.2 -0.60 -0.01 -0.64 -0.55 -0.22 -0.56 -0.04 0.13 0.06 -0.35 -0.01 Range 4.00 4.00 4.00 4.00 4.00 5.00 4.00 3.00 4.00 4.00 3.00 3.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Minimum 1.00 1.00 1.00 1.00 1.00 0.00 1.00 2.00 1.00 1.00 2.00 2.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Maximum 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Human capital measures by three variables ranged from 1 to 5, with 1 indicating the lowest level of skill and 5 indicating for highest level of skill The average level is 2.67, 3.19, and 2.98 is very close to the level of three with indicating for intermediate level of English proficiency, computer skills, and communication skills A review of the correlations shows that there is no correlation among variables Tabachnick & Fidell (2001) say that if there are few correlations above 0.4 it is a waste of time carrying on with the analysis; clearly, we do not have that problem
The measure of parent’s education (PareEdu) ranges from 1 to 5, with 5 indicating higher university level and 1 indicating other level of education (below high school level) Mean parental education level is 2.42 This number indicates that, on average, the parent’s education is between high school graduate and college – vocational graduate
The mean of number of friend (Frien) and time for friend (FrienMeet) are 3.2 and 2.3 These two variables also range from 1 to 5, with indicating for the same number of friend and time to meet friend a week
The activity at university consists of two measuring: the level of participation in extra-curricular activities (ECA1) such as music groups, sport team, and English clubs…, and community volunteer work (ECA2) such as green summer volunteer campaign, environmental clean-up campaign, and traffic control …
The means are 1.93 and 3.79 indicating that, level of participation for extra- curricular activity is less than level of participation for community volunteer work
Three variables represent for single factor – peers relationship during university period One question represents for the opinion of peer about education: how important to get good grades (PeerEdu) Other two questions regarding peer’s opinion on popularity are: Among your friends, how important of playing sport (PeerPupo1)? Among your friends, how important to get together with friend (PeerPopu2)? The average answers for the question are 2.97, 3.48, and 3.51 respectively In the dataset, 3 coded as moderate level This tells us that our sample has valued the education at a moderate level of importance
The other factor of social capital concentrates on the relationship between teacher and the students during university period Four questions ask about the quality of teaching in school and their relationship with teachers (TeachStu1, TeachStu2, TeachStu3, and TeachStu4) The means for the teacher-student relationship items range 3.60, 4.02, 3.87, and 3.49 reflect positive attitudes on these items
Students’ perception of university impact consists of 4 items measuring students’ view on the impact of university Four questions are asked to measure the impact
The mean of the 4 items are 2.95, 2.83, 2.85, and 3.12 relatively for impact on better jobs, for impact on higher salary, for impact on more responsibilities, and for impact promotion opportunity Overall, the surveyed people believed that it has a normal impact on better job, higher salary, more responsibly, and promotion activity
Income of individual (Y): Mean of income of individual is 3.18, which is very close to monthly income from 5.6 to 7.2 million VND a month
The correlation matrix of independent variables presents in the Appendix 1 A review of the correlations shows that there is no correlation among variables
Tabachnick & Fidell (2001) saying that if there are few correlations above 0.4 it is a waste of time carrying on with the analysis; clearly, we do not have that problem.
Modeling Analyses
In this section, the regression method applies to examine determinants of individual’s income It is necessary to test the regressed function to ensure that it meets the requirement of OLS (Ordinary Least Square) method and the estimators are BLUE (Best Linear Unbiased Estimators) The diagnostic test for regression function includes test for functional form, test for heteroscedasticity, test for normality, test for correlation, and test for muticollinearity The final regression function summarizes in following table
Variable Coefficient Std Error t-Statistic Prob Note
Coefficient of determination, R-square, is 0.41, suggesting that about 41% of the variation in the individual income has been explained by the explanatory variable use in the model
Table 4: Regression result of continuous dependent variable
Variable Coefficient Std Error t-Statistic Prob Note
Coefficient of determination, R-square, is 0.27, suggesting that about 27% of the variation in the individual income has been explained by the explanatory variable use in the model
The regression result in table 4 with INCOME is continuous variable The result is similar to the result of table 3 There are four variables, Eng, PareEdu,
TeachStu1, and FRIEMEET, statistical significant at level 5% The differences are TeachStu2, ComuSkill are insignificant, and FRIENMEET is significant at level 5%
Table 5: Regression result (CFA method for social capital)
Std Error of the Estimate
Peer relationship-PEER -0.10 0.08 -0.06 -1.13 0.26 Teacher and Student relationship - TECHSTU
The regression result in table 5 uses CFA for social capital Most of variables are insignificant except PARE is significant at level 5%
From the result of three different methods (Table 3, table 4, and table 5), the result of table 3 is the best result among three of them It is consistent with literature and expectation I choose the result of table 3 for explanation, policy implication, and conclusion for my research.
Explanation of coefficients
The regression result in table 3 indicates a statistically relationship between human capital, social capital and income of individual There are four variables, Eng, PareEdu, TeachStu1, and TeachStu2, statistical significant at level 5% The ComuSkill is significantly at level 10%
Eng: The English skill has the positive relationship with income of individual
The coefficient of Eng is 0.24 and significantly at 5% level It is consistent with the literature and hypothesis It means that when other factors keep non-change, in accordance with increase one level of English proficiency, individual income will increase 24%
Comuski: The communication skill is significant at 10% level It also has the positive relationship with income of individual It is consistent with literature
The coefficient of Comuski is 0.26 When other factors keep non-change, it means that income of individual will increase by 26% if increasing communication skill by one level
PareEdu: Parent’s education is the exogenous variable in the study It has a positive and significant effect at 5% level The coefficient of PareEdu is 0.58 It means that the higher level of parent’s education the higher income of children
Increasing 1 level of parent education will increase 58% of individual’s income with other factors keeps non-change It is also consistent with literature and hypothesis Based on previous literature review, socioeconomic status (SES) has often been examined many researchers have found that SES is an important variable of interest in studies In my study, SES conceptualizes as parents’ education It displays a strong positive effect on income of individual This relationship has shown that home-based social capital, which comprise of parent- child discussion on school activities, future education and parental involvement in school events, strongly relate to parents’ educational level The higher SES a family has the more home-based social capital the child would have and would subsequently benefit from the interaction with his/her parents In particular, since the time, energy, knowledge, and skills might be limited for parents with disadvantaged SES background, the students coming from these families might have less effective interaction with their parents on school related issues and the parents might be less active in participating in school events
TeachStu1: When teacher is interested to the student, it has the positive effect to the student The coefficient is 0.30 and significant at 5% level It is consistent with literature The student will have the positive effect when teachers are interested to the student Other factors does not change, income of individual will increase by 30% if we increase one level of interesting of teacher for student in term of learning
TeachStu3: The cheating at university has the negative effect to the income of individual The less cheating student is the better for income of student The coefficient is 0.21 and significant at 5% level One lower level of cheating at university, the income will increase by 21% and keep other factors unchanged.
Policy implication
This study examines whether social capital, especially in the form of parent’s education, and teacher and student relationship, and human capital, in form of
English and communication skills, significantly and positively relates to income of individual This study gives more support and evidence to literature for educators and policymakers Therefore, the results of this paper should be of particular interest to university policy makers and career counselors
The above result shows the positive effect of human capital conceptualized by English and communication skills, and social capital conceptualized by parent’s education, and teacher student relationship on the income of individual It is consistent with the theory and many other researches We can see the important of human capital and social capital to university graduate, not only the economic side but also on the other side of individual How to improve human capital and social capital is the question for individual, educators, and educational policy makers Because when everybody concerns and share each other with harmony and corporation, it will improve the social structure on the better way This will create good conditions for improve material and spirit life
For individual, to invest in human capital, especially English and communication skills, is necessary for university to get the good income in the current knowledge economy Student should actively invest in English and communication skills Besides the academic learning from university, students can come to some clubs or groups such as English speaking club to improve not only English proficiency but also communication skills
Parent’s education is exogenous variable This can be a reference for parent to see how important of this variable to children Parent with high education will interact well with their children about school, future career, and other activity that benefit a lot for their children
For educators, we can see that teacher and student relationship is one of the important factor affect to individual income Beside the interaction on class such as motivated asking question and motivated lessons building by teacher This can be a reference for educators to create more out of class activity to build up for teacher and student relationship
For educational policy maker has responsibility to create the good environment for educators to carry out and motivate their activity Besides that, educational policy maker should improve continuously education system to create the good environment for both students to improve themself and educators.
CONCLUSIONS AND RECOMMENTDATION
First, a summary of finding of my study is presented Secondly, the implications are outlined Finally, the limitations of my study and suggestions for future research are presented My study differs from others is focusing on university graduates in HCM by viewing income as the result of processes that begin from university measured by current social capital and cumulative social capital, as well as the effect of human capital
The regression analyses indicate that variables taken as measures of human capital such as English proficiency and communication skills have a positive impact on income of individual This finding is consistent with literature and the beliefs of many educators who think that the acquisition of human capital is of long-term benefit to students
Effects of SES: Based on previous literature review, socioeconomic status (SES) often examines in relation to parent’s education and many researchers have found that parent’s education is an important variable of interest in studies It displayed a strong positive effect on income of individual (b = 0.58, Prob 0.00) Parents’ educational level is strongly related to which comprise of parent- child discussion on school activities, future education and parental involvement in future career orientation This result is well expected since many studies have the same finding (Griffith, 1998; Grolnick and Slowiaczek, 1994; Sheldon, 2002)
For the effect of teacher-student relationship on income of university’s graduate,
2 out 4 are found to be insignificant (b = 0.30, Prob = 0.02and b = 0.21, Prob 0.03) In all, my study providing a strong support for the conclusion that teacher- student relationship has a significant effect on income of individual A number of previous studies have revealed that teacher-student relationship promoted students’ learning in later years with might has directly effect to income of individual in the future
Because of limited in time and cost, my study has only focused on university graduated in HoChiMinh city in general with a small sample size Hence, the result of my study is insufficient to set the policy for all education system and other provinces As the results, similar studies can carry out to have a deeper understanding and using as basis reference for individual, educators, and educational policy maker A deeper study should carry out to see whether the similar effect over long term
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Correlation matrices
TEACHSTU1 -0.03 0.17 0.06 0.09 0.06 0.07 0.11 0.13 0.01 0.23 0.46 1.00 0.19 0.29 0.22 0.13 0.28 0.22 0.33 TEACHSTU2 0.13 -0.02 -0.07 0.12 -0.14 0.09 -0.03 0.25 -0.08 0.01 0.26 0.19 1.00 0.34 0.10 -0.02 -0.02 -0.01 0.06 TEACHSTU3 0.15 0.11 0.10 0.15 -0.02 0.06 -0.02 0.20 0.01 0.12 0.39 0.29 0.34 1.00 0.23 0.20 0.16 0.17 0.15 TEACHSTU4 0.22 0.11 0.03 0.16 -0.05 0.09 0.07 0.18 -0.01 0.15 0.31 0.22 0.10 0.23 1.00 0.65 0.38 0.34 0.35 IMPSTU1 0.13 0.08 0.05 -0.01 -0.05 0.11 0.05 0.14 0.07 0.15 0.18 0.13 -0.02 0.20 0.65 1.00 0.48 0.47 0.33
Heteroskedasticity Test: (Breusch-Pagan-Godfrey)
Variable Coefficient Std Error t-Statistic Prob
Chisao= 32.67> LM=Obs*R-squared 81=>There is no Heteroskedasticity matter
Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter.
Prob F(19,232) Prob Chi-Square(19) Prob Chi-Square(19)
Dependent Variable: RESID^2 Method: Least Squares Date: 06/16/13 Time: 17:17 Sample: 1 252
Normality Test
Mean 1.30e-16Median -0.041494Maximum 2.880942Minimum -3.126483Std Dev 1.164512Skewness 0.079863Kurtosis 2.422765Jarque-Bera 3.766480Probability 0.152096
Regression result
Variable Coefficient Std Error t-Statistic Prob
Dependent Variable: INCOME Method: Least Squares
Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter.
Regression result of continuous dependent variable
Variable Coefficient Std Error t-Statistic Prob
Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter.
Dependent Variable: LOGINCOME Method: Least Squares
KMO and Bartlett's Test (Social capital)
Kaiser-Meyer-Olkin Measure of Sampling Adequacy
Bartlett's Test of Sphericity Approx Chi-Square 844.896 df 105
Anti-image Matrices
FRIE FRIE MEET ECA1 ECA2 PEER
FRIE FRIE MEET ECA1 ECA2 PEER
Extracting the Factors
FRIE 0.02 -0.13 0.37 0.66 0.10 FRIE 0.02 -0.08 0.18 0.18 -0.20 FRIEMEET 0.20 0.25 0.00 -0.46 -0.33 FRIEMEET 0.15 0.15 0.01 -0.09 0.17 ECA1 0.30 0.29 0.40 0.10 -0.36 ECA1 0.23 0.19 0.24 0.07 0.02 ECA2 0.40 0.60 -0.10 -0.10 0.16 ECA2 0.34 0.51 -0.04 -0.11 0.13 PEEREDU 0.31 0.51 0.50 -0.02 0.05 PEEREDU 0.26 0.41 0.44 0.00 0.01 PEERPOPU1 0.45 0.57 0.31 -0.03 0.07 PEERPOPU1 0.40 0.52 0.33 -0.08 0.01 PEERPOPU2 0.56 0.31 -0.24 0.34 0.03 PEERPOPU2 0.51 0.35 -0.20 0.20 -0.32 TEACHSTU1 0.18 0.30 -0.68 0.15 -0.01 TEACHSTU1 0.15 0.31 -0.58 0.16 0.22 TEACHSTU2 0.42 0.17 -0.54 0.30 0.00 TEACHSTU2 0.36 0.19 -0.38 0.11 -0.10 TEACHSTU3 0.67 -0.21 -0.21 -0.25 0.07 TEACHSTU3 0.64 -0.14 -0.22 -0.32 -0.11 TEACHSTU4 0.69 -0.30 -0.03 -0.35 0.16 TEACHSTU4 0.71 -0.27 -0.05 -0.46 -0.02 IMPSTU1 0.72 -0.32 0.19 0.01 -0.11 IMPSTU1 0.69 -0.25 0.16 0.14 0.13 IMPSTU2 0.72 -0.36 0.17 0.12 -0.05 IMPSTU2 0.72 -0.32 0.16 0.29 0.09 IMPSTU3 0.60 -0.42 -0.01 0.13 -0.12 IMPSTU3 0.54 -0.30 -0.03 0.23 0.05 IMPSTU4 0.09 -0.02 0.15 -0.09 0.84 IMPSTU4 0.07 -0.01 0.07 -0.05 -0.01
Giving the factors meaning
Obtaining the factor score coefficient matrix
FRIE 0.01 -0.07 0.23 0.59 0.10 2 0.00 1.00 0.00 0.00 0.00 FRIEMEET 0.06 0.13 0.00 -0.41 -0.31 3 0.00 0.00 1.00 0.00 0.00 ECA1 0.09 0.16 0.25 0.09 -0.34 4 0.00 0.00 0.00 1.00 0.00 ECA2 0.12 0.32 -0.06 -0.09 0.15 5 0.00 0.00 0.00 0.00 1.00 PEEREDU 0.09 0.27 0.31 -0.02 0.05
PEERPOPU1 0.13 0.30 0.19 -0.02 0.06 PEERPOPU2 0.16 0.17 -0.15 0.31 0.03 TEACHSTU1 0.05 0.16 -0.43 0.13 -0.01 TEACHSTU2 0.12 0.09 -0.34 0.27 0.00 TEACHSTU3 0.19 -0.11 -0.13 -0.23 0.07 TEACHSTU4 0.20 -0.16 -0.02 -0.31 0.15 IMPSTU1 0.21 -0.17 0.12 0.01 -0.11 IMPSTU2 0.21 -0.19 0.11 0.11 -0.05 IMPSTU3 0.17 -0.23 0.00 0.12 -0.12 IMPSTU4 0.03 -0.01 0.10 -0.08 0.80
Component Score Covariance Component Score Coefficient Matrix
Obtaining standardized scores
Teacher and Student relationship - TECHSTU 252 -2.37 2.31 0.00 1.00
Regression result (CFA method for social capital)
Std Error of the Estimate
QUESTIONAIRS
II EDUCATION ACHIEVEMENT - HUMAN CAPITAL
5 Computer skill (Microsoft office) (Meet your current job requirement):
7 Year of schooling of parent:
8 How many friends do you have?
9 How often do you contact these friends a month? (Direct meeting: Coffee, diner ) III.3 Extra Curricular Activity - ECA (Student period)
10 Did you participate any ECA in university?
11 Did you participate in community volunteer work? (Green summer volunteer campaign, traffic control )
III.4 Peer relationship - view of education (Student period):
12 Among your friends, how important to have a good grade?
III.5 Peer relationship - peer popularity (Student period):
13 Among your friends, how important of playing sport?
14 Among your friends, How important to get together with friend?
III.6 Teacher and Student relationship - Student period:
15 Was teacher interested in student? (in term of Learning)