Rural–Urban Migration, Household Vulnerability, and Welfare in Vietnam

SummaryThis paper investigates the interaction of migration, vulnerability to poverty, and welfare of rural households in three provinces in Central Vietnam. It addresses three questions. (1) To what extent do shocks motivate rural household members to move to urban areas?, (2) Are migrants in the new urban settings better off in terms of working conditions and quality of life?, and (3) What is the effect of migration on rural household’s welfare and vulnerability to poverty? The analysis uses panel data of 2200 households from rural Vietnam covering the period 2007–2010, and a tracking survey of 299 migrants from 2010. The empirical evidence from a probit model shows that migration, especially migration for employment, is a livelihood support strategy for households exposed to agricultural and economic shocks. Migration for education is more likely observed among households with higher human capital and being financially better off. Nevertheless, the probability of migration decreases with the employment opportunity in the village. Migrants perceive themselves to be better off at the place of destination, but income losses from shocks of their rural households may reduce their employment quality. The results from difference-in-difference specifications with propensity score matching techniques suggest that migration has positive income growth effects, and that these effects are more pronounced in provinces with fewer job opportunities. These effects help not only migrant households moving out of poverty, but it also improves the poverty situation in rural areas.