Are Migrants in Large Cities Underpaid? Evidence from Vietnam

Nguyen, Viet Cuong and Pham, Minh Thai (2012): Are Migrants in Large Cities Underpaid? Evidence from Vietnam.

Abstract

This paper examine the difference in wages between migrants and non-migrants (native workers) in large cities in Vietnam. It is found that migrants receive substantially lower wages than non-migrants. The wage gap tends to be larger for older migrants. However, once observed demographic characteristics of workers are controlled, there is no difference in wages between migrants and non-migrants. The main difference in observed wages between migrants and non-migrants is explained by differences in age and education between migrants and non-migrants.

• Item Type: MPRA Paper
• Language: English
• Keywords: Migration, underpaid, decomposition, household survey, Vietnam
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration

References

Acosta, P., C. Calderon, P. Fajnzylber, and H. Lopez., (2007). What is the impact of international remittances on poverty and inequality in Latin America?. World Development 36(1): 89-114

Adams, Jr. R., (2006) “Remittances, Poverty, and Investment in Guatemala” in “International Migration, Remittances, and the Brain Drain” edited by Çaglar, Ö., and Maurice, S., (2006)

Adams, R.H. and Page, J., (2005) “Do International Migration And Remittances Reduce Poverty In Developing Countries?” World Development Vol. 33, No 10., pp. 1645-1669 Augurzky, B. and Schmidt, C.M. (2001), “The Propensity Score: a Means to an End”, IZA Discussion Paper Series No. 271.

Beine, M., Docquier, F., and Rapoport, H., (2001) “Brain Drain and Economic Growth: Theory and Evidence”, Journal of Development Economics, 64, 1: 275-89.

Borjas, G. (2000), “Economics of Migration”, International Encyclopedia of the Social and Behavioral Sciences, Section No. 3.4, Article No. 38

Borjas, G.J., (2005), “Labor Economics”, Third Edition, McGraw Hill/Irwin, 2005.

Camarota, S. A., (1998), “The Wages of Immigration: The Effect on the Low-Skilled Labor Market”, Center for Immigration Studies, 1522 K Street N.W., Suite 820, Washington, DC 20005-1202 [phone] • fax [phone] • [e-mail].

Cohen, R. (2006) “Migration and its Enemies: Global Capital, Migrant Labour and the Nation-State”, Ashgate Publishing Limited, Gower House, Croft Road, Aldershot, Hampshire, GU11 3HR, England.

Cuong Viet Nguyen, Berg, M.V., and Lensink, R. (2011), “The Impact of Work and Non-work Migration on Household Welfare, Poverty and Inequality: New Evidence from Vietnam”. Economics of Transition, 2011, 1-29.

Dang, N. A, Tacoli, C., and Hoang, X. T (2003), “Migration in Vietnam: A Review of Information on Current Trends and Patterns, and Their Policy Implications”, Regional Conference on Migration, Development and Pro-Poor Policy Choices in Asisa, www.livelihoods.org

Dang, N.A., Tran, T.B., Nguyen, N.Q., and Dao, T. S., (2010), “Development on the Move: Measuring and Optimising Migration’s Economic and Social Impacts in Vietnam”, Country Report, Global Development Network.

De Brauw, A. and Harigaya, T. (2007). ‘Seasonal migration and improving living standards in Vietnam’, American Journal of Agricultural Economics, 89(2), pp. 430–447.

Docquier, F., and Marfouk, A., (2006), “International Migration by Education Attainment, 1990 -2000” in “International Migration, Remittences, and the Brain Drain” edited by Özden, C., and Maurice, S.,(2006)

Haas, H.D., (2007), “Remittances, Migration and Social Development: A Con ceptual review of the Literature”., Social Policy and Development Programme Paper Number 34, October, 2007. Code: PP-SPD-34

Heckman, J., R. Lalonde and J. Smith (1999). The Economics and Econometrics of Active Labor Market Programs. Handbook of Labor Economics, Volume 3, Ashenfelter, A. and D. Card, eds., Amsterdam: Elsevier Science.

Imbens, G., and Wooldridge, J. (2009), “Recent Developments in the Econometrics of Program Evaluation”, Journal of Economic Literature, Vol 47(1), 5-86.

John R. Hicks (1932)”The theory of Wages”, London:Macmillan, 1932, p.76

Katseli, L. T., Lucas, R., and Xenigiani, T (2006) “Effect of Migration on Sending Countries: What Do We Know?” OECD Development Centre, Working Paper No. 250. Research Programme on: Economic and Social Effects of Migration on Sending Countries, June 2006.

Marx, V., and Fleischer, K., (2010), “Internal Migration: Opportunities and Challenges for Socio-Economic Development in Vietnam”, the Programme Coordination Group on Social and Economic Policies of the United Nations in Viet Nam.

McDowell,C. and A. de Haan (1997), “Migration and Sustainable Livelihoods: A Critical Review of The Literature”, IDS Working Paper 65

McKenzie, D. J.,(2006). “Beyond Remittances: The Effects of Migration on Mexican Households” in “International Migration, Remittances, and the Brain Drain” edited by Özden, C., and Maurice, S.,(2006).

Mountford, A., (1997) “Can a brain drain be good for growth in the source economy?", Journal of Development Economics Vol.53 (1997):287-303.

Nguyen,T.P., Tran, N.T.M.T., Nguyen, T. N., and Oostendorp, R. (2008) “Determinants and Impacts of Migration in Vietnam”, Depocen Working Paper Series No. 2008/01, Hanoi, Vietnam: Development and Policies Research Center.

Özden, C.(2006), “Educated Migrants: Is There Brain Waste? ” in “International Migration, Remittances, and the Brain Drain” edited by Çaglar, Ö., and Maurice, S., (2006) Özden, C., and Maurice, S.,(2006) “International Migration, Remittences, and the Brain Drain”. A co-publication of the World Bank and Palgrave Macmillan.

Posel, D. (2002) “A Review of Current Literature and Recent Research on Migration in Southern Africa”, Working Paper.

Rosenbaum, P. and R. Rubin (1983), “The Central Role of the Propensity Score in Observational Studies for Causal Effects”, Biometrika 70 (1), 41-55.

Silver, A. (2006), “Families Across Borders: The Effects of Migration on Family Members Remaining at Home”.

Stark O., C. Helmenstein, and A. Prskawetz (1997), “A Brain Gain with a Brain Drain”, Economic Letters, Vol. 55, Issue 2, pp. 227-234.

Taylor, J. E., J. Mora, R. Adams, and A. Lopez-Feldman (2005), “Remittances, Inequality, and Poverty: Evidence from Rural Mexico”. Mimeo, University of California.