Determinants of Remittances: Recent Evidence Using Data on Internal Migrants in Vietnam*

Abstract

The present paper examines the determinants of remittance behavior for Vietnam using data from the 2004 Vietnam Migration Survey on internal migrants. It considers how, among other things, the vulnerability of a migrant's life at the destination, their link to relatives back home, and the time spent at the destination affect remittances. The paper finds that migrants act as risk‐averse economic agents and send remittances back to the household of origin as part of an insurance exercise in the face of economic uncertainty. Remittances are also found to be driven by a migrant's labor market earnings level. The paper highlights the important role of remittances in providing an effective means of risk‐coping and mutual support within the family.

Staying in the cities or returning home? An analysis of the rural-urban migration behavior in Vietnam

“…According to the 2009 Census, 6.6 million people migrated internally in Vietnam between 2004 and 2009. Accordingly, there are several studies which aimed at analyzing the determinants and impacts of migration in Vietnam; they find that the majority of migrants move because of economic reasons (e.g., Niimi et al 2009;UNFPA 2006UNFPA , 2010Dang et al 2003) and that migration helps in reducing poverty and improving the welfare of rural households by increasing their per capita income via remittances (Nguyen et al, 2015). However, to the best of our knowledge, there has been no study that deals with the length of migration and/or migration intensity in Vietnam.…”

“…According to Dang et al (2003), de-collectivization in the agricultural sector increased foreign direct investment flows and liberalization of the economy as part of the reforms provided an initial push to domestic migration. Later on, the growth in the private sector after the Enterprise Law was enacted in 2000, provided more lucrative job opportunities in the urban centers, increased the rural-urban wage gap, and hence promoted further influx from the villages to urban cities (Niimi et al 2009). …”

Social Margins and Precarious Work In Vietnam

“…Until the early 1990s, "organized migration" was the most common form of internal movement observed in Vietnam (Niimi et al, 2009, citing Guest, 1998Dang, Tackle, & Hoang, 2003). Since the mid-1990s, state-backed migration has been replaced increasingly by "spontaneous migration."…”

“…According to Marx and Fleischer (2010), 88.7% of Vietnamese households received some form of remittance from migrants. Thus, social support systems change as migrants increasingly provide remittances to families in rural areas (Niimi, Pham, & Reilly, 2009 the importance of migrants in Vietnam's economic development and increasing centrality of remittances in livelihoods, migrants are a highly vulnerable group. Data from the 2008 Migration Impact Survey show that 94% of migrants found "precarious and temporary jobs" in which they were not protected by the labor code or able to access other social services and protections.…”

“…Doi Moi has been the main driving force behind the shift from organized to spontaneous migration in Vietnam (Niimi et al, 2009). For example, it has been argued that the Doi Moi policy has affected internal migration in three distinct ways: (a) decollectivization in the agricultural sector has rendered farmers less tied to the land; (b) the marketization of the economy has allowed people, particularly those in the urban sector, to be considerably less dependent on government subsidies and rations for their daily necessities; and (c) the increased flow of FDI has attracted migrant workers to the regions that have been the main recipients of FDI (see Niimi et al, 2009). In fact, Hanoi and Ho Chi Minh City, the country's two leading economic regions, attract some 85% of FDI, whereas only 38% of the population lives in these regions (Cling et al, 2009).…”