(Luận văn) the impact of human capital and social capital on income of university graduate in ho chi minh city

t to ng UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES hi HO CHI MINH CITY THE HAGUE ep VIETNAM THE NETHERLANDS w n lo ad VIETNAM - NETHERLANDS y th ju PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS yi pl n ua al n va THE IMPACT OF HUMAN CAPITAL AND SOCIAL CAPITAL ON INCOME ll fu OF UNIVERSITY GRADUATE IN HCM CITY oi m at nh z z BY k jm ht vb NGUYỄN LIÊN HỒNG PHÚC l.c gm om MASTER OF ARTS IN DEVELOPMENT ECONOMICS an Lu n va ey t re th HO CHI MINH CITY, JULY 2013 t to ng hi INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE ep UNIVERSITY OF ECONOMICS w VIETNAM THE NETHERLANDS n lo ad y th ju VIETNAM - NETHERLANDS yi PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS pl n ua al n va THE IMPACT OF HUMAN CAPITAL AND SOCIAL CAPITAL ON INCOME ll fu OF UNIVERSITY GRADUATE IN HCM CITY oi m nh at A thesis submitted in partial fulfilment of the requirements for the degree of z z MASTER OF ARTS IN DEVELOPMENT ECONOMICS k jm ht vb om l.c NGUYỄN LIÊN HỒNG PHÚC gm By n va NGUYỄN VĂN PHƯƠNG an Lu Academic Supervisor: ey t re th HO CHI MINH CITY, JULY 2013 t to ng hi ep Contents ACKNOWLEDGEMENT iii w ABTRACT iv n lo ad CHAPTER 1: INTRODUCTION: y th 1.1 Problem Statement ju yi 1.2 Research Objective pl ua al 1.3 Research Question n 1.4 Research Methodology va n CHAPTER 2: LITERATURE REVIEW fu ll 2.1 Social capital and status attainment theory oi m at nh 2.2 Human capital and status attainment theory 2.3 Measurement of human capital 11 z z ht vb 2.4 Measurement of social capital 13 jm 2.5 Relationship between human capital and social capital 17 k CHAPTER THREE: METHODOLOGY 20 gm l.c 3.1 Introduction 20 om 3.2 Data collection 20 an Lu 3.3 The empirical model 21 ey 4.2 Modeling Analyses 38 t re 4.1 Descriptive Statistics 34 n va CHAPTER FOUR: DATA ANALYSIS AND RESULTS 34 th i t to ng 4.3 Explanation of coefficients 42 hi ep 4.4 Policy implication 43 CHAPTER CONCLUSIONS AND RECOMMENTDATION 46 w n REFERENCE 48 lo ad Appendix 1: Correlation matrices 59 y th ju Appendix 2: Heteroskedasticity Test: (Breusch-Pagan-Godfrey) 60 yi pl Appendix 3: Normality Test 61 al n ua Appendix 4: Regression result 62 n va Appendix 5: Regression result of continuous dependent variable 63 ll fu Appendix 6: KMO and Bartlett's Test (Social capital) 64 oi m Appendix 7: Anti-image Matrices 65 at nh Appendix 8: Extracting the Factors 67 z Appendix 9: Giving the factors meaning 68 z ht vb Appendix 10: Obtaining the factor score coefficient matrix 69 k jm Appendix 11: Obtaining standardized scores 70 l.c gm Appendix 12: Regression result (CFA method for social capital) 71 Appendix 13: QUESTIONAIRS 72 om an Lu n va ey t re th ii t to ng hi ACKNOWLEDGEMENT ep First and foremost, I would like to thank my academic supervisor Dr Nguyễn w n Văn Phương at Vietnam National University HCMC International University for lo ad the support, the ideas and constructive comments that helped me a lot to y th successfully finish this master thesis I also would like to thank Dr Phạm Khánh ju yi Nam and Dr Nguyễn Hữu Dũng for supporting during Thesis Research Design pl al n ua and encouragement I also am deeply grateful to my family for their love, n va support, encouragement and trust in me during the time of thesis processing ll fu oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re th iii t to ng ABTRACT hi ep My study investigates the effects of human capital and social capital on income w of university’s graduate in Ho Chi Minh City Human capital is captured by n lo English proficiency, computer skills, and communication skills Social capital is ad categorized by home-based capital, friend connection, extracurricular activities, y th peer relationship, teacher-student relationship, and university impact My study ju yi employs the data through the own survey in 2012 The empirical results are as pl follow: i) The English proficiency and communication skills have the significant al n ua impact on income of university’s graduate ii) The parent education and teacher- n va student relationship also have the significant positive effect on income of fu university graduate The message from my study can give to students, educators, ll and educational policy makers about the effect of social capital, and human oi m capital on income at nh z z k jm ht vb om l.c gm an Lu n va ey t re th iv t to ng CHAPTER 1: INTRODUCTION: hi ep 1.1 Problem Statement w n lo There are many studies about human capital and social capital alone on different ad y th status attainments such as economics, education, environmental, and many other ju things with different levels of impact on individual, firm, organization, and yi society instead of the combination between them Many researchers argue that pl ua al the relationship between human capital and social capital are substitution n (Piazza-Georgi 2002) The other side argues that it has the complementary n va relationship (Bruderl and Preisendorfer 1998) fu ll In the current market economy in Vietnam, education is the driven factor to m oi increase knowledge and competency Human capital is the key factor to increase nh value such as wages, competencies, and productivity not only for individual but at z also for firm and society as a whole (Denison, 1962; Schultz, 1961) The study of z ht vb Grayson in 2004 found that human capital had the positive contribution to jm income of university graduate in Canada Government has recently attracted k many multi-nation companies to invest in Vietnam so the demand of economy is gm increasing the demand for employee with a certain form human capital to meet l.c the requirements of the competitive business environment 'The knowledge, om skills and competencies and other attributes embodied in individuals that are an Lu relevant to economic activity' is the definition of human capital (OECD, 1998) proficiency, computer skills, and communication skills (Santarelli and Hien, n va With the context of my study, the human capital is captured by English t re ey 2012) th t to ng On the other hand, many studies investigate the effect of social capital on the hi many desirable outcomes of individual, household, and firm level The study of ep Yandan Wang examined the effect of social capital on job outcome of university w graduate by using the NELS – National Education Longitudinal Study in 2008 n lo The study emphasized how importance of the university environment to build up ad the social capital that had the positive relationship with job outcome for y th ju university graduates The study carried out by Nguyen Van Ha to see the impact yi of social capital on the household welfare in paper-recycling craft village in pl ua al 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 n n va see many researches to combine the human capital and social capital impact on ll fu one desirable outcome, especially for the level of individual oi m 1.2 Research Objective at nh With the above in mind, I am going to investigate the impact of combination z z between human capital and social capital on the income of university graduate in vb jm ht Ho Chi Minh City In the transition period of university graduate, the family and school (Yadan Wang, 2008) generate the social network Human capital k l.c gm accumulates through learning during university period The message from my study can give to students, educators, and educational policy makers about the om effect of social capital, and human capital on income an Lu 1.3 Research Question th ey bring the positive relationship to income? t re Research question 1: Does the investment of individual for the human capital n va The major relationships investigated in this study are: t to ng Research question 2: Does the current social capital and cumulative social capital hi during university period have the positive impact on income of university ep graduate in Ho Chi Minh City? w n 1.4 Research Methodology lo ad y th My study uses the survey data of university graduate in Ho Chi Minh City with ju the samples size is 252 The combinations of three method of survey are face-to- yi pl face interview, drop off, and email The econometric method employed is OLS n ua al (Ordinary Least Square) with robust standard errors n va The major independent variables in the proposed model are cumulative social ll fu capital during university (extra-curricular activity, voluntary service work, and oi m social connection), current social capital, and Home base social capital represented by Social Economic Status (parent education level); Human capitals nh at which measured by English skills, communication skills, and computer skills z z vb The result of this study aims many readers First, student can use this as a jm ht preference for good preparation for the transition period Second, educators and k educational policy makers can use this to have the good design program for gm student during university to achieve the desirable human and social capital om l.c an Lu n va ey t re th t to ng CHAPTER 2: LITERATURE REVIEW hi ep Before carrying out the study, we have to know that what the definition of social w capital, human capital is How is the relationship between human capital and n lo social capital? What is the theory behind that? In particularly, we have to answer ad the question what the definition of social capital and human capital is in the y th context of this study, and how we can measure it ju yi pl 2.1 Social capital and status attainment theory ua al n Bourdieu (1986) defines social capital as “the aggregate of the actual or potential va resources which are linked to possessions of a durable network of more or less n ll fu institutionalized relationships of mutual acquaintance and recognition.” He oi m focused on the social capital with relationships such as family, schooling, and at nh workplace environment He states that social capital involves “transforming contingent relations, such as those of neighborhood, the workplace, or even z z kinship, into relationships that are at once necessary and elective, implying vb jm ht durable obligations subjectively felt (feelings of gratitude, respect, friendship, etc.)” (1983) k gm Three form of social capital are obligations and expectations, relational networks, l.c and social trust and norms (Coleman, 1990) The social capital can help om individual to obtain their objective and mission through the social relationship an Lu and network of social tie The study of Coleman, which carried out in 1988 to ey capital to social relationships that can help individual to accomplish a task or t re by using the series of National Educational Longitudinal Study He refers social n va examined the relationship between the social capital and education achievement th