The development process in Vietnam goes hand-in-hand with informal sector expansion and increasing outflows of international migration. This paper studies the less-examined link between international migration and job creation in the informal sector, by looking for scientific evidence on the impacts of international migration on entrepreneurship in the informal sector. Specifically, the study investigates patterns of migration in Vietnam and whether migration has impacts on employment generation by creating jobs for those remaining at home in the form of family business start-ups.
The study uses the propensity score matching (PSM) method to analyze the nationally representative 2008 household data on international migration, collected under the ‘Development on the Move: Measuring and Optimizing Migration’s Economic and Social Impacts’ (DotM) project.
Results show no self-employment differential between migrant and non-migrant households. Migration matters only when taking into business scale into account. Poor and rich families both migrate. This reflects the effectiveness of the government’s poverty reduction-based labor export programs and the tendency of rich families to send children to study abroad. Rather than investing in production, however, a proportion of remittances is being spent on housing improvements or savings, with no effect on informal sector employment or entrepreneurship. This raises concerns about the long-term benefits of international migration.
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