An explanation for vietnams recent migration pattern based on cumulative causation theory and relative deprivation theory

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM ERASMUS UNVERSITY ROTTERDAM INSTITUTE OF SOCIAL STUDIES THE NETHERLANDS VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS AN EXPLANATION FOR VIETNAM’S RECENT MIGRATION PATTERN BASED ON CUMULATIVE CAUSATION THEORY AND RELATIVE DEPRIVATION THEORY BY Vu Thu Ha MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, DECEMBER 2017 VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS AN EXPLANATION FOR VIETNAM’S RECENT MIGRATION PATTERN BASED ON CUMULATIVE CAUSATION THEORY AND RELATIVE DEPRIVATION THEORY A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By Vu Thu Ha Academic Supervisor: Prof Dr Nguyen Trong Hoai HO CHI MINH CITY, DECEMBER 2017 DECLARATION I hereby declare that this thesis paper entitled “An explanation for Vietnam’s recent migration pattern based on cumulative causation theory and relative deprivation theory” has been written by me, representing the result of my own work, in compliance with the guidelines and disciplines of Vietnam Netherlands Programme The contribution of my supervisor and collaboration with others, specified in the acknowledgement, to fulfill this research are consistent with normal supervisory practice This dissertation, or any substantial part of this dissertation, has not been submitted for any previous qualifications or any other institutions Date: 01 December 2017 Signature: _ Full name: Vu Thu Ha i ACKNOWLEDGEMENT It is impossible for me to finish my thesis without the guidance from my supervisor, Prof Dr Nguyen Trong Hoai, knowledges provided by Vietnam Netherlands Programme, help from my classmates and supports from my family First and foremost, I would like to send my special thanks to my supervisor, Prof Dr Nguyen Trong Hoai, who is always ready to steer me to the right direction, to give me useful advices when I have trouble with my research and to motivate me to explore my ability I am so grateful for all of his dedication and devoted attention in every single step in my journey of conducting this research Having a chance to work with him is really an unforgettable experience in my life I would also like to thank Dr Pham Khanh Nam, Dr Truong Dang Thuy and all other lectures and mentors from Vietnam Netherlands Programme for their valuable lessons, guidance and knowledge that they shared to me throughout the program I appreciate all of wonderful experience and fantastic friends in class VNP22 that I’m luckily obtained thanks to attaining this course Last but not least, I must express my profound gratitude to my family for providing me unconditional supports and unceasing encouragement that I can pursue my learning desire From bottom of my heart, I want to say thank you all ii ABSTRACT This paper combines cumulative causation theory and relative deprivation theory to explain incentives and influences on decision to send migrants of a household, concerning interaction of the household’s characteristics, especially factors related to income, and the features of the origin community Two subsets of data from two successive Vietnam Household Living Standards Surveys (VHLSS) in period from 2010 to 2014 are established and employed to avoid endogeneity in the analysis of migration pattern in Vietnam in 2012 and 2014 By using logit method and combination of difference-in-difference (DID) and propensity matching score method (PSM), we find some interesting results that have never been found in previous empirical studies for Vietnam case First, the competitiveness competence level of the origin province may reduce possibility of work migrants Furthermore, relative income status before migration event, represented by ratio of income per capita of a household over the average income per capita in the origin province, may positively affect the possibility of sending migrants of the household Then, returns from migration, could create a significantly positive effect on the relative income status of the household at the origin via remittance channel, generating an automatic mechanism in migration progress as expected in the cumulative causation theory Keywords: migration, cumulative causation theory, relative deprivation, remittance, relative income, PCI JEL classification: O15, F24, D31 iii TABLE OF CO I II INTRODUCTION 1.1 Problem statement 1.2 Research questions 1.3 Research objectives 1.4 Data and methods 1.5 Thesis structure LITERATURE REVIEWS 2.1 Migration theory reviews 2.2 Relative deprivation theory 2.3 Remittance – the link between the migrant 2.4 Conceptual framework 2.5 Empirical studies III METHODOLOGY 3.1 The dataset 3.2 Main applicable concepts 3.3 Stage one: examining determinants of migr 3.3.1 Model 3.3.2 Variables 3.4 Stage two: testing effects of migration IV RESULTS AND DISCUSSION 4.1 Determinants for migration in Vietnam in 4.2 Impacts of migration on income and expen V CONCLUSION 5.1 Main findings 5.2 Policy implication 5.3 Limitation of the study REFERENCES APPENDIX Annex 1: Descriptive statistics of explanatories in year 2010 Annex 2: Descriptive statistics of explanatories in year 2012 iv LIST OF FIGURES Figure 1: A general framework of migration decision making 10 Figure 2: The conceptual framework for the migration pattern in relation with the relative income status of a household and the origin community 21 Figure 3: Difference-in-Difference estimation, graphical explanation .33 v LIST OF TABLES Table 1: Logit regressions of determinants of migration in period 2010-2012 36 Table 2: Logit regressions of determinants of migration in period 2012 -2014 42 Table 3: Impact of migration on income and expenditure in 2012 52 Table 4: Impact of migration on income and expenditure in 2014 55 vi ABBREVIATION DID Difference-in-Difference PCI Provincial Competitive Index PSM Propensity Matching Score US or USA The United States of America VHLSS Vietnam Household Living Standards Survey VMS Vietnam 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