Determinants of Remittances: Recent Evidence Using Data on Internal Migrants in Vietnam*

The present paper examines the determinants of remittance behavior for Vietnam using data from the 2004 Vietnam Migration Survey on internal migrants. It considers how, among other things, the vulnerability of a migrant's life at the destination, their link to relatives back home, and the time spent at the destination affect remittances. The paper finds that migrants act as risk‐averse economic agents and send remittances back to the household of origin as part of an insurance exercise in the face of economic uncertainty. Remittances are also found to be driven by a migrant's labor market earnings level. The paper highlights the important role of remittances in providing an effective means of risk‐coping and mutual support within the family.     

IMPACTS OF TRADE LIBERALIZATION ON EMPLOYMENT IN VIETNAM: A SYSTEM GENERALIZED METHOD OF MOMENTS ESTIMATION

Using a system generalized method of moments model, the present paper investigates the impacts of trade liberalization on employment in Vietnam from 1999 to 2004. The results show that the increase in industrial output increased labor demand, whereas the increasing wage rate led to a decline in the employment level. The impact of export expansion on derived labor demand was positive and statistically significant, indicating that the higher level of exports than previously presented employment opportunities for the country's large labor surplus. As far as imports are concerned, empirical observations indicate that imports did not necessarily negatively impact Vietnam's employment level.     

Foreign Multinationals and Local Firms in Vietnam's Economic Transition*

This paper compares the economic performance of foreign multinational corporations (MNC) and local firms in Vietnam, distinguishing between two distinct types of local firms: state‐owned enterprises (SOE) and non‐SOE. Between the mid‐1990s and 2000, foreign MNC in Vietnam's economy grew very rapidly, but their growth has been much slower thereafter. Consistent with the theoretical suggestion that MNC possess relatively large amounts of firm‐specific assets related to production technology, marketing networks and management know‐how, these comparisons suggest that foreign MNC were generally larger and had higher labor productivity, capital intensity, wage levels, investment propensities and trade propensities than non‐MNC. On the other hand, foreign MNC tended to have relatively low capital productivity and wage shares of value added, while results regarding profitability were mixed. In general, these differentials tended to be relatively small between foreign MNC and SOE, and SOE tended to be larger than foreign MNC in terms of employment. Correspondingly, comparisons of foreign MNC with non‐MNC generally revealed more consistent differences, largely because the local private sector is still very underdeveloped in Vietnam.     

REVISITING INFORMAL EMPLOYMENT AND SEGMENTATION IN THE SOUTH AFRICAN LABOUR MARKET

This study revisits the definition of informal employment, and it investigates the puzzle of high open unemployment co‐existing with relatively limited informal employment in South Africa. We estimate earnings equations using data from the September 2004 Labour Force Survey and present evidence of persistent earnings differentials not only between formal and informal employment, but also between types of informal employment. These persistent earnings differentials are suggestive of complex segmentation in the South African labour market and challenge the presentation of informal employment as an undifferentiated residual with no barriers to entry or mobility.     

IMPORTED SKILL‐BIASED TECHNOLOGICAL CHANGE IN DEVELOPING COUNTRIES

This paper discusses the occurrence of skill‐enhancing technology import, namely, the relationship between imports of embodied technology and widening skill‐based employment differentials in low‐ and middle‐income countries. Generalized method of moments (GMM) techniques are applied to an original panel dataset comprising 28 manufacturing sectors for 23 countries over a decade. Econometric results provide robust evidence of the determinants of widening employment differentials in low‐ and middle‐income countries. In particular, the proposed empirical evidence indicates capital–skill complementarity as a possible source of skill bias, while imported skill‐enhancing technology emerges as an additional driver of increasing demand for the skilled workers in these countries.     

Effect of Participation of Foreign Migrant Workers in Labour Market on Native Workers: Evidence Based on Change Noticed in College Premium in Taiwan ROC

Using Manpower Utilization Survey data for 14 years from 1999 to 2012, we applied the DDDD (Differences–in–differences–in–differences–in–differences) estimation method to check if rising presence of foreign migrant workers in Taiwan’s domestic labour market had any impact on employment opportunities and wages earned by native Taiwanese workers over time. We used the data capturing the effect of college premium (viz., the additional cost to be borne for getting admission into college) paid by the natives on domestic wage rate during this period. College premium is an indicator of demand and supply for educated labour and we intend to see if the premium has grown with time when influx of foreign migrant workers has grown too. From the results, two interesting phenomena caught our attention. First, labour policy adopted by the Government in Taiwan has played an important role in increasing the influx of foreign workers into domestic labour market, which resulted in significant change in college premium paid by the natives. And, this effect lasted even when instances of strikes and reported cases of labour disputes were relatively higher. Second, the effect of the policy has been varying across genders as our data shows that policy on employment of foreign workers has affected job opportunities of native men workers more than it affected job opportunities of their female counterpart.     

INFORMALIZATION OF INDUSTRIAL LABOR IN INDIA: EFFECTS OF LABOR MARKET RIGIDITIES AND IMPORT COMPETITION

Since the 1980s, industrial labor in India has been increasingly informalized, manifested in a rising share of unorganized sector employment and the growing use of temporary and contract workers, and subcontracting in organized manufacturing. Using unit‐level data from the National Sample Survey employment–unemployment survey for 2004–5, the paper investigates econometrically whether labor market rigidities and import competition have been responsible for the informalization of industrial labor in India. The results of econometric models show that labor market reforms tend to increase the creation of regular jobs, while import competition tends to raise casual employment among workers with education levels above primary.     

Productivity Spillovers from FDI in Malaysian Manufacturing: Evidence from Micro‐panel Data*

Using an establishment‐level panel dataset for the Malaysian manufacturing industries for 2000–2004, we argue that differences in the proxies and degrees of foreign shareholdings in measuring foreign presence lead to opposite signs and/or significance of spillover effects. The results show significant evidence of positive productivity spillovers to local establishments in the same industry, based on a broad measure of foreign presence. However, there is no evidence of positive spillover when employment share is used as a proxy for foreign presence. Furthermore, significant negative spillover effects are related to higher employment shares of wholly foreign‐owned establishments. Although there is no significant difference in labor productivity between wholly foreign‐owned and locally‐owned establishments, both majority and minority foreign‐owned establishments have significantly lower levels of labor productivity than locally‐owned establishments in Malaysia.     

Deployment of Indonesian migrants in the Middle East: present situation and prospects

"This paper examines the Indonesian overseas employment program. It is limited to overseas deployment through the official channels, i.e. organised by licensed labour suppliers and approved by government authorities. The main destination of this official labour migration is the Middle East. Indonesian officials have indicated that the government aims to increase overseas employment and to shift deployment from houseworkers to better skilled workers. It is argued in the paper that, in view of a shrinking labour market for migrants, even limited realisation of these hopes would depend upon some distinct changes in the overseas employment program."     

Where are the migrants from? Inter- vs. intra-provincial rural-urban migration in China

Using a representative sample of rural migrants in cities, this paper investigates where the migrants in urban China come from, paying close attention to intra-provincial vs. inter-provincial migrants, and examining the differences in their personal attributes. We find that migrants who have come from within the province differ significantly from those who have come from outside of the province. Using a nested logit model, we find that overall, higher wage differentials, larger population size, higher GDP per capita, and faster employment growth rate are the attributes of a city that attract rural-to-urban migrants. In addition, moving beyond one's home province has a strong deterrent effect on migration, analogous to the “border effect” identified in international migration studies. We also explore the role of culture, institutional barriers, and dialect in explaining such a pronounced “border effect”.     

Wage Consequences of Rapid Tertiary Education Expansion in a Developing Economy: The Case of Thailand

In recent years, Thailand has experienced the emergence of “overeducated” workers as the supply of university graduates in Thailand has outpaced growth in high‐skilled employment opportunities. Using the 2007 to 2009 Thai Labor Force Survey, this paper quantifies the incidence of overeducation and estimates overeducation wage penalties among male university graduates. The results show that the incidence of overeducation is greatest among younger cohorts. Quantile wage regression results suggest that overeducation wage penalties for older workers capture the impact of unobserved low ability on wages. In contrast, persistent wage penalties of 11–26% across the wage/ability distributions for younger workers are consistent with structural imbalances in the Thai labor market. These imbalances make it difficult for university graduates to find jobs commensurate with their level of formal education and to achieve their full earning power. The wage penalties are especially large for new entrants into the labor market.     

THE EFFECTS OF WORKERS' REGION OF BIRTH ON LABOR MARKET OUTCOMES IN THE REPUBLIC OF KOREA

In this paper, we investigate empirically whether there are differences in labor market outcomes according to workers' region of birth. We also investigate whether wage differentials by region of birth are due to taste discrimination, statistical discrimination as measurement error, or both of these things. The empirical analyses based on the Korean Labor and Income Panel Study (KLIPS) data show the following. First, Honam‐born workers have a higher migration ratio to other regions than Youngnam‐born workers. Second, workers born in other regions have a higher propensity to become contingent workers and are paid significantly lower wages than Seoul/Kyonggi‐born workers. Finally, our empirical tests support the third hypothesis that wage differentials by region of birth are attributable partly to statistical discrimination as measurement error and partly to taste discrimination. We rejected a hypothesis based solely on taste discrimination as well as a hypothesis based solely on statistical discrimination as measurement error.     

Structure of Firm Location Choices: An Examination of Japanese Greenfield Investment in China*

This paper presents an empirical investigation of the location decision structure of Japanese investors in China. In this study, a nested logit model and rich Japanese firm‐level greenfield manufacturing foreign direct investment data are calibrated together. This examination is not only driven by the unsatisfactory model specification of the conditional logit model in previous location choice analyses, specifically the violation of the independence from irrelevant alternatives assumption; but is also driven by the urgent need to better understand foreign investors’ in general and Japanese investors’ in particular location decision structure in China. Two potential hierarchical and sequential location decision‐making structures of Japanese investors are then tested, which are respectively in line with the spatial divide of China's FDI preferential policies and with China's six traditional census areas.     

IMPACT OF COMMUNIST PARTIES ON THE INDIVIDUAL DECISION TO JOIN A TRADE UNION: EVIDENCE FROM INDIA

This paper analyzes the impact on individual decisions to unionize of several factors: the reach of communist parties, the degree of political activism, personal attributes of workers, and industrial characteristics. The workers examined are Indian nonagricultural regular workers, using micro-data from the 2004–5 Employment and Unemployment Survey conducted by the National Sample Survey Organisation, linked to state-level factors. A notable result is that the reach of communist parties has considerable effect on unionization probability. Moreover, it seems that the mere existence of communist parties in a state also facilitates unionization to some extent. State-level political activism and unemployment rate also influence the individual decision to join a union. The paper concludes also that a worker's gender, marital status, ethnic background, employment status, experience, occupation, sector of employment, establishment size, and type of industry remain important in the determination of union membership.     

Solution to the Dilemma of the Migrant Labor Shortage and the Rural Labor Surplus in China

Since 2003, China＇s labor market has been facing two coexisting crises： a rural labor surplus and a severe shortage of migrant labor Using data from the 2000 China Health and Nutrition Survey questionnaire, which covers 288 villages in 36 counties, this paper attempts to find a solution to this dilemma. Specifically, a multinomial logit model, a Mincer- type model and a probit model are applied to examine the effect of educational level on the employment choices for rural laborers, and on the wages and the employment status of migrants. Based on the results of our analysis, we propose the implementation of policy aimed at increasing the educational level of rural dwellers, in conjunction with other policies to eliminate all artificial barriers, to facilitate the migration of rural laborers.     

IS THERE EVIDENCE OF A WAGE PENALTY TO FEMALE PART‐TIME EMPLOYMENT IN SOUTH AFRICA?

In this paper, we investigate female part‐time employment in South Africa. Using household survey data for South Africa from 1995 to 2004, we show that women are over‐represented in part‐time employment, and that the growth in part‐time work has been an important feature of the feminisation of the labour force. In contrast to many studies of part‐time work in other countries, however, we find evidence of a significant wage premium to female part‐time employment. The premium is also robust to fixed effects estimations using Labour Force Survey panel data from 2001 to 2004, where controlling for unobservable differences increases its size. The premium persists with different hourly thresholds defining part‐time employment and when we account for possible reporting errors in hours worked.     

A Case of Sticky Floors: Gender Wage Differentials in Thailand

Using 2004 Household Socio‐Economic Survey data for Thailand, we explore the gender wage differentials across the entire unconditional wage distribution and find a strong sticky floor effect. Glass ceilings, although observed along with sticky floors in the raw data and pooled regressions, disappear in the counterfactual decompositions, suggesting a strong sticky floor pattern in gender wage differentials in Thailand. Whereas the evidence for most European countries points to glass ceilings, our findings for Thailand are qualitatively similar to those from other South Asian and Southeast Asian countries for which evidence exists; namely, Singapore, the Philippines and Sri Lanka.     

Rising black unemployment: Changes in job stability or in employability?

This article analyzes the effects of changes in flows into and out of unemployment on the growing gap between black and white unemployment rates in the 1970s and 1980s. Current Population Survey data show that black workers’ unemployment inflows increased, suggesting that job instability increased. Declining employment opportunities were also implicated, as black workers left unemployment for a job less often in 1987 than in 1971. White women’s situation improved considerably, with lower inflows and higher employment probabilities. Although the effects of declining federal equal employment opportunity (EEO) pressure cannot be detected, these findings are consistent with increasing racial discrimination.     

The impact of mandated employment verification systems on state‐level employment by foreign affiliates

Faced with diminishing prospects for a comprehensive immigration reform at the federal level, states have started to take immigration matters into their own hands. For example, many states have been mandating the use of employment verification (E‐Verify) systems to confirm work eligibility. Some of the consequences of these E‐Verify mandates remain unclear. In this article, we focus on the effect of anti‐illegal immigrant laws on foreign investment. Specifically, we exploit the state‐level and time variation in the enactment and implementation of E‐Verify mandates to explore if punitive measures against the firm impact states' ability to attract foreign direct investment (FDI). We quantify FDI through the employment by U.S. affiliates owned by foreign firms. Our results suggest that E‐Verify mandates adversely affect employment among these majority‐owned U.S. affiliates and, therefore, work against states trying to attract FDI.     

Internal Migration of Blacks in South Africa: An Application of the Roy Model

This study investigates the internal migration of black males in South Africa over the period after the formal end of Apartheid using the 1996 census data. The two issues of our primary interests are the following: (i) whether migration patterns of black individuals are consistent with the income‐maximising hypothesis as related to the destination choice; and (ii) whether the redistribution of human capital is detected in internal migration. The results from conditional logit regressions on choices among individuals in 318 districts show that individuals prefer districts with higher expected wages, conditional on other regional characteristics. In addition, there exist differing preferences on the share of population with post‐secondary education by individuals with commensurate educational attainments. Black individuals with post‐secondary education tend to migrate into areas with a higher share of population with post‐secondary education and vice versa, which confirms the divergence of human capital levels across districts.