Date of Thesis

Spring 2023

Description

This thesis studies whether there is an earnings disparity between urban and rural migrant workers in Vietnam’s urban areas and whether that earnings gap is due to individual characteristics and human capital levels or other unobserved factors. In this paper, urban workers, or urban residents, are workers who have household registration status in the urban cities where they work. On the other hand, rural migrant workers, or rural-to-urban migrants, are defined as workers who live and work in urban cities but have their registered household statuses in other rural areas. Using the Vietnam Household Living Standard Survey (VHLSS) in 2008, 2010, 2012, 2014, and 2016, the thesis uses multivariate ordinary least squares (OLS) regression to examine the earnings gap while controlling for gender, educational attainment, and potential experience. Moreover, I use a quantile regression technique to decompose the gap over the distributions of earnings between urban and rural migrant workers into observable factors (characteristics effects) and unobservable factors (coefficient effects). The thesis is the first study in Vietnam to use quantile decomposition to investigate the earnings gap between urban and rural migrant workers.

The OLS regression result suggests that although rural-to-urban migrants receive lower hourly earnings compared to their urban counterparts, once the observed demographic characteristics of the workers are controlled, this earnings gap becomes small and not statistically significant. However, the quantile decomposition results suggest that rural migrant workers earn more than urban workers at the lower earnings quantiles, while they earn less than their urban counterparts at the upper-end of the earnings distribution. Notably, the differences in personal characteristics drive the rural-to-migrants’ earnings down compared to the earnings of the urban workers. To address this issue, Vietnam's policymakers could prioritize strategies aimed at strengthening the personal attributes and human capital development of rural migrant workers, helping to enhance their overall skills and capabilities.

Keywords

Vietnam, Quantile Decomposition, Earnings, Urban, Rural

Access Type

Honors Thesis

Degree Type

Bachelor of Science

Major

Mathematical Economics

Minor, Emphasis, or Concentration

Chinese

First Advisor

Thomas Kinnaman

Second Advisor

Carl Lin

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