Determinants of nonfarm participation among ethnic minorities in the Northwest Mountains, Vietnam

Tran Quang, Tuyen (2014): Determinants of nonfarm participation among ethnic minorities in the Northwest Mountains, Vietnam.

Abstract

This study is the first to analyze the intensity of nonfarm participation and its correlates among ethnic minority households in the Northwest Mountains - the poorest region of Vietnam. We found that ethnic minority households depend heavily on agriculture for subsistence and their access to nonfarm employment is very limited. Households that participated in nonfarm activities have a much higher level of education, income, assets and a lower level of poverty than those without nonfarm participation. Factors affecting the level of nonfarm participation were examined by using a fractional logit model. The results show that education, notably among other factors, has a strongly increasing effect on the intensity of nonfarm participation. Having more annual crop land and water surface for aquaculture reduces the intensity of participation in nonfarm activities. In addition, some commune characteristics were found to be closely linked to the extent of nonfarm participation. A commune with nonfarm job opportunities and paved roads increases the intensity of nonfarm participation for households living in that commune. From the findings what policy implication can be drawn is that any poverty alleviation policies should aim at improving the access of ethnic minorities to education and nonfarm job opportunities.

• Item Type: MPRA Paper
• Language: English
• Keywords: fractional logit, ethnic minorities, intensity, nonfarm participation
• Subjects: I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I38 - Government Policy ; Provision and Effects of Welfare Programs; J - Labor and Demographic Economics > J1 - Demographic Economics > J15 - Economics of Minorities, Races, Indigenous Peoples, and Immigrants ; Non-labor Discrimination; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development

References

Ackah, C. (2013). Nonfarm employment and incomes in rural Ghana. Journal of International Development, 25(3), 325-339. Cardoso, A. R., Fontainha, E., & Monfardini, C. (2010).

Children’s and parents’ time use: Empirical evidence on investment in human capital in France, Germany and Italy. Review of Economics of the Household, 8(4), 479-504.

Cuong, N. V. (2012). Ethnic minorities in Northern Mountains of Vietnam: poverty, income and assets. MPRA Working Paper 40769.

Ellis, F. (2000). Rural livelihoods and diversity in developing countries. New York, NY: Oxford University Press.

Escobal, J. (2001). The determinants of nonfarm income diversification in rural Peru. World Development, 29(3), 497-508.

Gallaway, T., Olsen, R. N., & Mitchell, D. M. (2010). The economics of global light pollution. Ecological Economics, 69(3), 658-665.

Gujarati, D. N., & Porter, D. C. (2009). Basis Econometrics. New York, NY: Mc Graw-Hill

Huang, J., Wu, Y., & Rozelle, S. (2009). Moving off the farm and intensifying agricultural production in Shandong: a case study of rural labor market linkages in China. Agricultural Economics, 40(2), 203-218.

Imai, K. S., Gaiha, R., & Kang, W. (2011). Poverty, inequality and ethnic minorities in Vietnam. International Review of Applied Economics, 25(3), 249-282.

Jonasson, E. (2011). Informal employment and the role of regional governance. Review of Development Economics, 15(3), 429-441.

McGuinness, S., & Wooden, M. (2009). Overskilling, job insecurity, and career mobility. Industrial Relations: A Journal of Economy and Society, 48(2), 265-286.

Minot, N., Epprecht, M., Anh, T. T. T., & Trung, L. Q. (2006). Income diversification and poverty in the Northern Uplands of Vietnam (Vol. 145). Washington, D.C: International Food Policy Research Institute.

Oseni, G., & Winters, P. (2009). Rural nonfarm activities and agricultural crop production in Nigeria. Agricultural Economics, 40(2), 189-201. doi: 10.1111/j.1574-0862.2009.00369.x

Papke, L. E., & Wooldridge, J. M. (1996). Econometric methods for fractional response variables with an application to 401 (k) plan participation rates. Journal of Applied Econometrics, 11(6), 619-632.

Pham, T. H., Bui, A. T., & Dao, L. T. (2010). Is nonfarm diversification a way out of poverty for rural households? Evidence from Vietnam in 1993-2006. PMMA Working Paper 2010-17.

Rahut, D. B. (2006). Rural non-farm employment in the lower Himalayas of Eastern India. PhD, Göttingen University, Cuvillier Verlag, Bonn.

Ruben, R., & Van den berg, M. (2001). Nonfarm Employment and Poverty Alleviation of Rural Farm Households in Honduras. World Development, 29(3), 549-560.

Tung, P. D., & Trang, D. T. (2014). 54 ethnic groups: why different? Hanoi, Vietnam: Mekong Developmet Research Institute.

Tuyen, T. Q., Lim, S., Cameron, M. P., & Huong, V. V. (2014). Farmland loss, nonfarm diversifiction and inequality among households in Hanoi's peri-urban areas, Vietnam. International Development Planning Review, 36(3), 356-379.

UNDP. (2012). Strengthening capacity in ethnic minority policy formulation,implementation and monitoring – EMPCD. Hanoi, Vietnam: United National Development Program.

Van de Walle, D., & Cratty, D. (2004). Is the emerging non-farm market economy the route out of poverty in Vietnam? Economics of Transition, 12(2), 237-274.

Van de Walle, D., & Gunewardena, D. (2001). Sources of ethnic inequality in Viet Nam. Journal of Development Economics, 65(1), 177-207.

Wagner, J. (2001). A note on the firm size–export relationship. Small Business Economics, 17(4), 229-237.

WB. (2012). 2012 Vietnam poverty assessment - Well begun, not yet done : Vietnam's remarkable progress on poverty reduction and the emerging challenges. Washington DC: The World Bank.