Luận văn thạc sĩ rural urban micration and urban unemployment, the case of ho chi minh city

-~· - INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM VIETNAM- THE NETHERLANDS PROGRAMME FOR M.A in DEVELOPMENT ECONOMICS RURAL- URBAN MIGRATION AND URBAN UNEMPLOYMENT, THE CASE OF HO CHI MINH CITY r ·80 GIAO DVC DAO TAO TRUONG DAI HQC KINH TE TP.HCM THU~VIEN By BUI QUY THUAN \ Ill ~ Lt r IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN DEVELOPMENT ECONOMICS Supervisor: PhD, Professor of Economics Nguyen Thi Canh HO CHI MINH CITY, JANUARY 2008 123doc 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 h~lp received m prepanng this dissertation and all sources used, have been acknowledged in this dissertation." Signature Bui Quy Thuan Date: 20th December 2007 123doc - - ACKNOWLEDGEMENTS I would like to thank more than those respectable name that I will mention following Without them, I can not get knowledge as today and this thesis may not even have existed First, I would like to express my special thanks to all organizations and member those found this programme All lectures and staff of the project help me having useful lessons, interesting seminars and new information Next, I wish to express sincere appreciation to my academic supervisor PhD, Professor of economics Nguyen Thi Canh for his helpful guidance and assistance during the writing of this thesis I also deeply thank to Nguyen Hoang Bao PhD for his valuable suggestion and ideals about earlier research design of this thesis, thank to Mr Danh class 13 in Master of Arts in Development Economic Programme for his valuable support in extracting database Following, I send my thanks to Librarian, Mrs Nguyen Kim Chi, who helps help me in finding necessary document and reference books Thank to Le Thanh Loan PhD Statistic Office Department of Ho Chi Minh City who provides secondary data for this thesis Many thanks go to my classmate, who shared with me joys and hardness during the time I study in this program 123doc - ABBREVIATIONS AIDS Acquired Immune Deficiency Syndrome FDI Foreign Direct Investment HCMC Ho Chi Minh City GSO General Statistics Office GDP Gross Domestic Product MARD Vietnamese Ministry of Agriculture and Rural Development MOLISA Ministry of Labor, Invalids and Social Affairs MPI Ministry of Planning and Investment UNFPA United Nations Population Fund UNDP United Nations Development Program STis Sexually Transmitted Infections UN United Nations SOEs State- Owned Enterprises VHLSS Vietnam Living Standards Survey VND Vietnam Dong (Vietnamese Currency) VLSS Vietnam Household Living Standards Survey 123doc ABSTRACT This study explores the link between migration and wage level, which affect employment at destination area and the relationship between labor market performance and the probability of unemployment in Ho Chi Minh City The paper base on standard economic theories to present that the difference migration and wage level at destination, while an effect unemployment differentials on migration The empirical evidence present based on the 2004 Vietnam Migration Survey, which conducted by GSO and UNFP A Results find that relate between migration and urban unemployment in Ho Chi Minh City, recent migrants well at finding formal employment, and are much less likely to be unemployed i 123doc TABLE OF CONTAIN CHAPTER 1: INTRODUCTION 1.1 Problem statement 10 1.2 The research objective of the thesis 11 1.3 Main hypothesis to be tested 11 1.4 The scope and limitation of the thesis 11 4.1 The scope of the thesis 11 1.4.2 The limitation ofthe thesis 12 1.5 Methodology 12 1.6 Data source 12 1.7 Research framework 12 CHAPTER 2: LITERATURE REVIEW 2.1 Migration and factors affect on migration 14 2.1.1 Migration definition 14 2.1.2 Factors effect on migration 16 1.3 The effects on origin and destination areas 17 2.2 Migration and urban unemployment in developing countries 18 2.2.1 Migration in developing countries 18 2.2.2 Urban unemployment in developing countries 20 2.3 Migration theories overview 23 2.3.1 Lee's migration theory 23 2.3.2 The dual economy development model 24 2.3.3 The Harris- Todaro model 26 2.4 Economic impacts 28 2.4.1 Migration and economic development 28 2.4.2 The relationship between the wage differential and employment 29 2.5 Summing up 31 CHAPTER 3: MIGRATION AND URBAN UNEMPLOYMENT IN VIET NAM THE CASE OF HO CHI MINH CITY 3.1 An overview migration in Vietnam 33 123doc 3.1.1 History and the trend of internal migration in Vietnam 33 3.1.1.1 Historical development of migration in Vietnam 33 3.1.1.2 The trend of internal migration in Vietnam 35 3.1.2 Internal migration in VietNam 37 3.1.3 Employment and migration in VietNam 39 3.2 Migration in Ho Chi Minh City 41 3.2.1 Overview migration in Ho Chi Minh City 41 3.2.2 Structure of migrants in Ho Chi Minh City 42 3.2.3 A profile of migrants Ho Chi Minh City 44 3.1 Age Structure 44 3.2.3.2 Sexual 44 3.2.3.3 Place ofOrigin 45 3 Education level 48 3.2.3.5 Working status and income 49 3.3 Migration and urban unemployment, the case of Ho Chi Minh City 51 3.3.1 Reasons for out- migration and motivation for migrating to HCM City 51 3.3.2 The migration and wage differential 53 3.3.3 Employment and unemployment in Ho Chi Minh City 55 CHAPTER4:METHODOLOGY 4.1 Introduction 59 4.2 The econometric design 59 4.3 Description of the data 61 4.4 Variables description in model 62 4.4.1 Dependent variables 62 4.4.2 Independent variables 62 4 2.1 Individual characteristic variables 62 4.4 2 Occupation variable 63 4.4.2 Migrant status variable 63 CHAPTER 5: ECONOMETRIC ANALYSIS AND RESULTS 5.1 Descriptive analysis 66 123doc 5.2 Results of regression model 71 5.2.1 The wage model 71 2.1.1 Estimate coefficients 71 5.2.1.2 Comment on results 73 5.2.2 Unemployment model 74 5.2.2.1 Results ofregression 74 5.2.2.2 Comment on results 75 5.3 Summary 77 CHAPTER 6: CONCLUSION AND POLICY IMPLICATIONS 6.1 Conclusion 78 6.2 Policy implications 80 REFERENCES 82 123doc LIST OF TABLES Table 2.1: Rural-urban migration as a percentage of urban population growth, selected developing countries 21 Table 2.2: Rates of urban and rural unemployment as a percentage ofthe active population in Africa, by country and year 22 Table 2.3: Percentage of open urban unemployment in four African countries 23 Table 3.1: Decrease and increase population by internal migration region, VietNam: 1994 - 1999 Table 3.2: The structure of the labor force 40 Table 3.3: Population and migration increase rate by period 43 Table 3.4: Percentage of distribution age structure of Ho Chi Minh City population and that of migrants 45 Table 3.5: Percentage distribution of migrant sex ratio by some age group 45 Table 3.6: Percentage distribution of place of previous origin of migrants by area of current residence 46 Table 3.7: Percentage distribution ofresidence status of migrants in HCM City 47 Table 3.8: Percentage of distribution of population rate in schooling by ages 49 Table 3.9: The rate of population of dropout of school of children over the age and educationallevel 49 Table 3.10: Percentage distribution of employment of migrants in 2004 by economic sectors 51 Table 3.11: Monthly average income (dong) in 2004 51 Table 3.12: Percent of migrants citing specified reason for move by area of current residence and sex 53 Table 3.13: Monthly income of rural to urban migrants by working skill, education 55 Table 3.14: Distribution of employment of migrants in 2004 by economic sectors 56 Table 3.15: Unemployment rate of labor force of working ages in urban area 57 Table 4.1: Description variables used in the model 64 Table 5.1: Characteristics ofboth migrants and non-migrants affect to their wage 68 Table 5.2: Percentage distribution of occupation of employed population by migration status 70 Table 5.3: Regression result ofunrestricted model (14 variables) 71 Table 5.4: Regression result ofunrestricted model (12 variables) 72 Table 5.5: Probability of Unemployment: Logit regression for Migrants and Nonmigrants 75 123doc CHAPTER INTRODUCTION 1.1 PROBLEM STATEMENT In the past 20 years, Vietnam has been remarkably successful in ensuring high levels of economic growth and in reducing poverty This goes hand in hand with important shifts in population distribution and mobility The economic reforms carried out in 1986-affected migration in three main ways In agriculture and the introduction of the household contract system have released farmers from the land In cities, the household registration system continues, but no longer limits the acquisition of essential goods and access to employment In the emerging industrial sector, Vietnam's incorporation into the global economy, it has resulted in flows of foreign direct investment attracting migrant workers where such industries, services The migration from rural to urban areas has been an important part of the urbanization process and created structural changes population among regions, especially make labor market adjustment from agriculture to manufacturing and services sector in modernization and industrialization process in Vietnam Todaro and Harris (1970), the migration of rural to urban areas is an important part of the problem urban unemployment and underemployment in almost every contemporary big city in developing countries Rural to urban migration mainly caused the labor force in rural to become scarcely Simultaneously created urban unemployment for unskilled and skill labor in formal and informal sector Ho Chi Minh City is the largest economics central in Viet Nam The city and its surroundings have lured more investors than any other area in Viet Nam By at the end 2006, Ho Chi Minh City had toped about attracting FDI account to 26,9% of project, 24,1% total registered capital (reported by MPI, 10-2006) This thesis will to what find is relational migration and under what circumstance? In addition, how to it is relate to urban unemployment in Ho Chi Minh City? Should local government intervene and create conditions to attract high skill employment as migrants Moreover, what should be their policy to reduce unemployment situation in 10 123doc The regression result with 14 independent variables in above table is shows that STAY and SE variables are not statistically significance with statistical significance at 10% level in the model Therefore, to test whether these variables can drop from the linear model, we make use ofF - test following: H 1: at least /313 or /314 = (R~ F c 13 and /314 * -R;)/(k-m) (1-R~)/(n-k) c F * 0, or both /3 = (0,1749-0,1745)/(14-12) = 242 (1-0,1749)/(10006-14) ' With statistic significant 10% level, we have: F;~ 9992 J (0,1) = 2,3 Since Fe )F;_~, 9992 l (0,1) = 2,3 => we accept the null hypothesis The null hypothesis supposes that coefficient of STAY and SE variables equal zero For all variables of selection model, p value is smaller than 10%, it means that all variables of model are meaningful It showed that the null hypothesis is accepted Table 5.4: Regression result of restricted model (12 variables) Variable Ols Coefficient 0.047778 (0.005764) -0.000611 (7.79E-05) 0.130445 (0.014005) 0.185809 (0.050109) 0.141990 (0.045789) 0.149846 (0.072683) 0.248164 (0.015166) 0.414694 (0.051637) AGE AGESQ GENDER SINGLE MARRIED DIVORCED HIGH SCHOOL COLLEGE (P>: t: ) Prob 0.0000 0.0000 0.0000 0.0002 0.0019 0.0393 0.0000 0.0000 71 123doc 0.640481 0.0000 (0.028818) -0.811452 0.0000 ILLITERATE (0.043940) 0.303754 0.0000 MIGRANT (0.015057) -0.070948 0.0000 URBAN (0.017605) Note: The standard errors are given in parentheses Dependent variable = natural log of monthly wages Source: Author's calculation from the VietNam migration survey 2004 UNIVERSITY 5.2.1.2 Comment on results The wage function specified to include individual characteristics such as gender, age, marital status, and other relevant information such as the time of person to stay at Ho Chi Minh City, residential status and individual status of employment variable According to the human capital theory suggests that demand for education reflects the decision to undertake an investment in order to maximize the lifetime earnings In the above results, the level of earnings is explained by a set of individual characteristics, by a dummy variable for migrants, which allows a distinct intercept effect between migrants and non - migrants and captures a location specific human capital between the migrant dummy and the age, age squared, marital status, education and other variables Table 5.4 presents the exogenous variables effect on log monthly wages Males enjoy higher wages than females In fact a man, regardless of being migrants and non migrants, earn 13% than a women per month, on average and ceteris paribus, perhaps confirming the existence of some form labor market discrimination Overall the marital status variable not reveal a different impact on wages, in which from above result it appears that married people earn higher than other persons The variables which demonstrate the most different effect on earnmgs are the education dummies and they all agree with real situation in earning which for migrants and non - migrants Those who completed high education level, on average and ceteris paribus, earn more than those who have primary education or no education, that positively affect earning both migrants and non - migrants but that cannot be observed and measured details among them In addition, there may be differences that arise from 72 123doc the socio-economic background that cannot capture If the direction of correlation between the unobserved variables and earning is positive, the coefficients of the human capital variables biased upward Living in an urban area has strong impact on earning: on average and ceteris paribus, those who live in city earn 30% than people resident in the rural area One possible explanation is the existence of compensating differentials for lower livings cost and more pleasant environment enjoyed in the rural area The sign of these estimates prove that wage increase with age, educational level except no education or illiterate that is negative with wage, and residential status But at a decreasing rate with migrant which is specified clearly, on average and ceteris paribus, migrants have wage level lower than non - migrants Summarizing, three factors can highlight the positive of internal migration on wage level, detected using the Vietnam migration survey, give support to the migration theory This theory in fact predicts that migrate from rural to urban sectors with the aim of obtaining employment with higher wage level than their original that is an investment decision The second conclusion, some unobserved characteristics could induce lower R-squared for explaining independent variables affect to dependent variable The third conclusion is that migrants may have lower wage level compared to non migrants, which suggested by the negative sign of the coefficient dummy variable This may be due to initially low educational level and its career opportunities, and/or lack of family networks and contacts, which would help to find the best jobs available in the destination 5.2.2 Unemployment model 2.1 Results of regression A logit model is used to analyze the impact of personal characteristics on the probability of being unemployed in which collected from the Vietnam migration survey 2004 (GSO and UNFA, 2004) 73 123doc Table 5.5: Probability of Unemployment: Logit regression for Migrants and Non - migrants Logit Coefficient Variable (P>: t: ) Prob -0.619999 0.0275 (0.281210) -0.022013 0.0000 GENDER (0.004262) -0.033968 0.5939 SINGLE (0.063708) 0.082732 0.7238 MARRIED (0.234098) 0.076756 0.7239 DIVORCED (0.217262) -0.218463 HIGH SCHOOL 0.5615 (0.376245) 0.082617 COLLEGE 0.2226 (0.067738) -0.220420 UNIVERSITY 0.3779 (0.249979) -0.264493 ILLITERATE 0.0724 (0.147220) -0.135271 URBAN 0.5404 (0.220964) -0.181486 MIGRANT 0.0231 (0.079892) -0.004214 STAY 0.9644 (0.094484) Note: The standard errors are given in parentheses Dependent variable = binary choice, taking the value of if the person is unemployed and the value of the person is employed Source: Author's calculation based on Vietnam migration survey, 2004 AGE As in the wage equation, particular emphases give to the individual variable: the key issue is whether being person has a distinctive effect on the probability of unemployed and other variables are responsible for different patterns 5.2.2.2 Comment on results The problem of employment is quite marked in transitional economies, which may suggest that the official estimates of the unemployment rate are misrepresenting the real situation In particular, among migrants and non - migrants, the true unemployment may be lower or higher than survey data reported, which means that 74 123doc data available are not able to capture potential differences m the unemployment likelihood between migrants and non - migrants In the results estimated by logit technique, the independent variables are a set of personal characteristics, a dummy variable for migrants The dependent variable takes the value of one if a person is resulted unemployed at the time of the surveyed and otherwise According to the International Labor Organization, unemployed are those who have no job but are actively looking for one The employed group combines employees and self -employed A ceteris paribus analysis shows that all variables have the sign of coefficient and probabilities are not significant at 10% level These results suggest that at least between migrants and non- migrants in the unemployment effect at Ho Chi Minh City Moreover, this result confirms the findings in the literature that characteristics difference in unemployment rate in most countries are small (Layard, Nickell and Jackman, 1991) The age coefficient shows that, young people are more likely to be unemployed, and the effect is pronounced for migrants and non - migrants, the coefficient sign affect negative with unemployment function The theoretical explanation of this pattern that mean they can lack seniority and hence they are more vulnerable to job- dismissals In addition, they are more inclined to wait until they find the suitable job in the future On other hand, migrant coefficient also shows that migrant is slightly affected to unemployed This is discovered an inverse relationship between education and unemployment, simultaneously the limited in finding job between migrants and nonmigrants Concluding, the data reveal that individual characteristics between migrants and non migrants be considered a distinct, the coefficient of the migrant dummy is negative but not statistically significant, and other variables in a non significant effect on the probability of unemployment, suggesting that a longer time in the destination area does 75 123doc not provide any positive on the unemployment likelihood In conclusion, it emerges that the distinction between migration and probability of unemployment is quite frail in Ho Chi Minh City 5.3 SUMMARY The purpose of this thesis was to study the relationship between migration and urban unemployment in Ho Chi Minh City, apply a neoclassical theory In the wage and unemployment functions, the distinction between migrants and non-migrants emphasized in order to detect any significant positive effect of migration on earnings but the related likelihood of unemployment to migration is not tight That mean the findings of job opportunities, between migrants and non - migrants, in which is not distinctive at Ho Chi Minh City The positive effect of migration on wages revealed by the data, gives support to the human capital theory, which predicts that individuals invest in migration to enjoy greater economic opportunities Migrants choose destinations where the returns to their personal characteristics maximized These results have treated with caution: thee existence of unobservable characteristics, which differentiate migrants, and non migrants that drive the migration decision can give rise to a potential bias in the coefficients On other hand, the interpretation of the results in the unemployment function is more ambiguous and direct support for the human capital theory did not obtained The distinction between migration and unemployment is quite frail but the migration logit function confirmed the role for economic variable in the migration decision, the results reveal differentials are an important explanation for migrating from rural to urban areas Finally, the methodology adopted to base on a strong assumption: in this model, the migration flow drawn along a temporal dimension, which captures years, simultaneously it is first migration survey, the wage and unemployment differentials need to assume constant throughout the time 76 123doc CHAPTER6 CONCLUSION AND POLICY IMPLICATIONS 6.1 CONCLUSION Migration and its social- economic impacts, especially at urban areas, have studied in many countries on the world There are many different views about this problem Some say that migration is a response to unequal distribution of social and economic opportunities between rural and urban areas Then, different levels of development in various regions of a country determine the magnitude and direction of population movements and migration regarded as an equilibrating mechanism Migration can generate substantial benefits not only for migrants themselves but also for areas of origin and home communities Economic liberalization policies pursued the Government of VietNam since 1986 have affected nature of migration and employment Those policies have promoted the private sector, provided greater scope for self- employment and closed or reduced the size of loss - making state enterprise This study focus on migration and urban unemployment situation at Ho Chi Minh City, where is the best choice by high rate in economic growth, highest income per capita in whole country and getting a job easily Most of migrants are in working ages, healthy and better education than people who still stay at urban area Although the unemployment rate in urban areas is rather high but migrants' unemployment rate is not high, because a significant ratio of migrants work in informal sector and they accept simple jobs or heavy works with low income Findings The primary objective of this thesis is to explore the link between migration and wage level, which affect employment level at destination area and the relationship between labor market performance and the probability of unemployment The analysis focuses on the pattern of migration related to wage and the probability of unemployment, including migrants and non- migrants characteristics The results suggest that the difference wage level and opportunities in finding in Ho Chi Minh City compare with origin areas can serve as important factors associated with 77 123doc movement and migrant status In fact, the situation regarding their first and last moves is a strong predictor of migrants' success in the labor market at place of destination The significant effects of migration on occupation is positive because of a large percentage of migrants are working in the both informal and informal economic sector Industrialization has happened very rapidly and it has totally changed the face of urban sector, the local labor force cannot meet the labor requirements of these enterprises and a number of enterprises suffer from a shortage of labor Migrant's labor has many opportunities in finding suitable jobs in Ho Chi Minh City However, the migrants of many different ages with different work skill, hence great shares of migrants have to find jobs outside enterprises working as small traders, street vendors and so on to earn a living On other hand, migrants who have a poor educational background, especially those who have not had any job training occupy the greatest in the informal sector Similarly, non- migrants or permanent registration who have a better education level or better work skill than migrants are normally working for enterprise offering long term contracts and stable jobs Simultaneously, they have many opportunities in finding good jobs compare with migrants As recorded by the data from Vietnam Migration survey 2004 that is based on calculate on the table 5.1, most migrants move to Ho Chi Minh City at relatively young ages, average 28 ages, this is young labor force with quite good work skill which can meet the requirements of these enterprises That is also to have many opportunities to find jobs for them in Ho Chi Minh City On other hand, female migrants accounted over half moves to compare to male Female migrants concentrate mainly on working for clothing, leather and shoe as well food-processing factories For male migrants who are more likely to change jobs than their female counterparts are The findings reflect a more disadvantaged situation for female migrants in the current job market The paper analysis also revealed a very high level of employment and economic activity among migrants in Ho Chi Minh City Moreover, a part of the migrants is composed college and university students from other areas who, after graduation, prefer to stay and find career opportunities in the city that correspond to their education level than in their hometown 78 123doc The employment status of migrant and time of stay in Ho Chi Minh City not have a strong significant effect on the duration of job search and the wage level, which received Recent migrants are able to obtain employment more rapidly after migration, when compared to those who migrated a longer time ago This reflects both increasing job and income opportunities as well as employment competition in today labor market that has attracted more migrants to Ho Chi Minh City There is also a strong tendency for upward occupational mobility associated with the process of migration in Vietnam, the case of Ho Chi Minh City In fact, migration can serve as an effective mechanism that labor migrants, including females, can use to increase their position on the occupational ladder In general, migration is an important way for rural people to improve their lives and contribute to urban development in Ho Chi Minh City Ho Chi Minh City is a large labor market with big demand for labor force, including both informal and formal economic sector That is creating many opportunities in finding job for migrants and non - migrants The results indicate the relationship between migration and urban employment is quite frail in Ho Chi Minh City which means that the surveyed data are not able to capture potential difference in the employment and unemployment between migrants and non - migrants But in fact, in industrializing process in Vietnam in general, the case of Ho Chi Minh City with shortage of labor skill and big demand for labor force, migrant's labor contribute on economics growth Simultaneously they also can reduce pressure underemployment and disguised unemployment in rural areas In general, the strong development in Ho Chi Minh City has generated enough jobs for migrants who are willing to work and take jobs, which are available As a result, most of them have earned an income that is much better than what they earned in their rural areas 6.2 POLICY IMPLICATIONS Migration is becoming an increasingly important component of population change; migration in Vietnam has been characterized by increasing levels movement, increasing participation of migrants in market relations and marked redistribution of 79 123doc - - the population, through migration, from rural to urban areas heavily populated to less heavily populated areas On other hand, migration is closely linked to social and economic development and to government policies in local authorities Urban areas provide a valuable source of employment for rural migrants Urban jobs demand relatively higher skill requirements and pay higher wages It hence conceivable that rural migrant's relatively greater skills may have a better chance of finding urban job and have a higher urban to rural wage gain Migration is positive phenomenon through which the economic resources are better utilized By establishing a link between the difference earning gap and career ; opportunities in urban areas, local authorities should research to create more employment opportunities for both migrants and non - migrants in economic development strategies at Ho Chi Minh City Migration from rural to urban areas inevitable phenomenon in the process of urbanization, due to the attraction exerted by city with employment opportunities, living standard and modem convenience Moreover, the impact of rural migration on the city has two sides, both positive and negative The contribution made to the economic life of the city by migrant workers is undeniable but at the same time this labor force also puts an extra pressure on urban sector such as infra - structure, environment and urban unemployment The city authorities should find some solutions to the existing problems suffered by migrants and permanent residence status who are taking part in contribute the economic development of the city and have found stable accommodation (putting into practice Law of Residence approved by National Assembly year 2006 in Ho Chi Minh City with a decree on regulation of migrant's housing) However, the original authorities should focus on training vocational schools or practical training courses because the schools can help labor force in reducing the dependence on agricultural income, creating the non-farm works at the local that prevent migration outflow to urban areas The local authorities also should create the advantage credit policies to help them in create jobs in rural, especially unskilled labor 80 123doc 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 Simultaneously, the Government should create an appropriate rural - urban economic balance and non - economic opportunities to ameliorate urban and rural unemployment problems and to slowing the pace of rural - urban migration The main issue of activity should promote the integrated development of the rural sector, the spread of smallscale industries throughout the countryside and social investments toward rural areas Indicated by the study findings, both rural and town-based migrants have decided to move directly to urban centers and large cities Urban centers and large cities in Vietnam continue to grow together with the spread of the market economy its associated labor migration Ever larger numbers of people will come and settle in the cities As seen in this study, the observed outcomes of migration are in favor of large cities such as Ha Noi and Ho Chi Minh City It suggested that a restructuring of the city economy, to make it more robust and absorptive of labor migrants, might be a solution As for towns, where agricultural activities still play a significant role, they should be integrated into the urban economy in the promotion of rural-urban linkages In addition, from migration survey data, the wage function confirmed the role for economic variables in the migration decision The results reveal that wage differentials are an important explanation for the propensity to migrate, the analysis found wage level at the destination influence migration into large city, and the wage and unemployment differentials need to be assumed constant throughout the time In this study, the relationship between migration and urban unemployment is quite frail in Ho Chi Minh City but the role of employment is an important factor in the migration decision to Ho Chi Minh City Therefore, the study may be good foundation for further studies about the absorption of skilled labor migrants and settle their housing problem in Ho Chi Minh City 81 123doc REFERENCES Alan Coulthart, Nguyen Quang and Henry Sharpe: Urban Development Strategy, meeting the challenges of rapid urbanization and the transition to a market oriented economy, HaNoi 2005 Arellano, J P (1981): "Do More Jobs in the Modem Sector Increase Urban Unemployment?" 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Structure of migrants in Ho Chi Minh City According to Statistic Department of Ho Chi Minh City, the results of the mid 2004 population census (1st Oct 2004) in Ho Chi Minh City has shown that,... percent of growth of the largest cities of HaNoi and Ho Chi Minh City (General Statistic Office, 2001) In recent year, urbanization has been taking place rapidly and vigorously in Ho Chi Minh City