(Luận văn) rural urban micration and urban unemployment, the case of ho chi minh city

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