Abstract
This chapter examines the gaps in homeownership and housing conditions between rural-to-urban migrants and local urban residents using the 2013 Vietnam Rural–Urban Migration Survey and the 2012 Vietnam Household Living Standards Survey. It employs probit and ordinary least squares (OLS) regression models and applies the Oaxaca decomposition technique to delineate the demographic and socioeconomic characteristics that shape migrant–urban local housing inequality. The results reveal that migrants are significantly less likely than local urban residents to be homeowners and that their living conditions are not as good as those of the urban locals, even after controlling for household characteristics. Our results further reveal that 45% of the homeownership and housing conditions gaps are attributable to differences in family characteristics. The remaining differences between the two groups are attributable to unexplained factors such as differences in the ability to access formal credit, commitment to establishing residence upon arrival, choice and preferences, inheritance, parental financial support and accumulated wealth. As a robustness check, we also decompose the two gaps between migrants with KT1 ho khau (household registration) status and those with rural ho khau. The results suggest that restrictions imposed by the ho khau system may have a role to play.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
In the 2009 Vietnam Population and Housing Census, migrants are defined as people whose place of residence 5 years prior to the time of the census was different from their current location. This definition, therefore, excludes worker dormitories, which are predominantly occupied by short-term, temporary and circular migrants.
- 2.
Wang and Zuo (1999) quote the following five gaps between migrants and urban residents for China: segregated labour market and occupations, low income and poor benefits, temporary housing and residential segregation, individual instead of familial migration, and an absence of social integration.
- 3.
This survey randomly sampled over 5500 migrants of all types.
- 4.
- 5.
Before economic renovation (Doi moi) in 1986, Vietnam was under a planned economic system. During that period, housing in cities was mainly provided by the state. However, the state was only able to provide housing to about one-third of civil servants due to the excess demand for low-priced housing (Drakakis-Smith and Dixon 1997). Housing reform began in 1986 with a gradual withdrawal of state housing provision and its final termination in 1992. The government also introduced a range of policies to encourage individuals and companies to engage in housing construction. As a result, for instance, between 1985 and 1997, about 70% of new accommodation in Hanoi was constructed using financial capital from private sources (Phe 2002; Quang and Kammeier 2002). Also in 1994, the government launched a scheme to privatise the existing state-owned housing stock—a scheme described as the ‘socialisation of state housing’. Consequently, 68% of state-owned housing in Hanoi was privatised by 2006 (Tran and Dalholm 2005).
- 6.
For example, they were not eligible for the National Targeted Programs for poverty reduction.
- 7.
However, due to the inconsistent application of the 2006 Law on Residence across the country, while local authorities in Hanoi appear to be using the new residential categories rigorously, those in Ho Chi Minh City are still applying the four previous types of KT1–KT4 (Marx and Fleischer 2010). Therefore, in our chapter, we define our variables using the old system of all four levels.
- 8.
A new housing law was passed and took effect on 1 July 2015 (No. 65/2014/QH13). The 2015 Housing Law sets the framework for reform in the housing sector. In addition to promoting the participation of the private sector, it attempts to ‘address the shortage of affordable rental housing as well as high demand for housing from the low income groups, especially workers in industrial zones of large cities’ (World Bank 2015: xi). It includes incentive policies such as preferential loans through social policy banks or appointed credit institutions for eligible individuals to build or renovate their housing (Article 50, Clause 4). Registration of permanent residence in the province where the social housing is located or registration of temporary residence in that province for at least 1 year is required to benefit from the incentive policies (Article 51, Clause 1b).
- 9.
Policy on social housing was initiated by the Government in 2009 and in 2011 the Prime Minister approved the Strategy of National Housing Development by 2020, with a vision to 2030 (Decision No. 2127/QD-TTg 30/11/2011). The strategy provides details of beneficiaries with housing difficulties, including low-income people in urban areas, workers in industrial zones, students, the rural poor and people living in disaster-prone areas. The government also launched a VND30 trillion stimulus package in June 2013 to stimulate the real estate market to reorient lenders and developers towards actual demand from middle and low-income consumers. Migrants who obtained permanent ho khau or registered for temporary residence in cities with social insurance contributions for at least 1 year are eligible to rent social housing or access credit from the stimulus package to purchase social housing. However, unregistered or short-term migrants do not benefit from these policies. The World Bank (2015: xv) comments on the overall effectiveness of the package that ‘it largely benefits the formally employed middle class at high economic cost to the government’.
- 10.
This survey was conducted as follows. First, a list of rural households along with their telephone numbers was taken from the VHLSS2012—the income module. Second, all listed rural households were phoned to check whether they had any members who had migrated to Hanoi, Ho Chi Minh City or other surrounding urban areas. If they had, information and contact details of migrants were collected. Third, these migrants and their families were interviewed.
- 11.
For example, the survey may miss rural poor households who do not have a landline or mobile phone.
- 12.
As long as either a household head or their spouse holds a KT1 ho khau, they will be counted as an urban local.
- 13.
According to the Vietnamese Labour Law, the standard retirement age for males is 60.
- 14.
In the VRUMS2013 database, we drop 20 households with KT2 while combining 33 unregistered households with those holding rural ho khau.
- 15.
According to the World Health Organisation, overcrowding refers to the situation in which more people are living within a single dwelling than the amount of space available.
- 16.
According to the 2012 Law on the Capital, a rental house with a living area not smaller than 5 m2/person is required for migrants to acquire permanent residence.
- 17.
The Vietnamese Government set a living area target of 25 m2/person by 2020.
- 18.
We classify our occupation groups into: (1) Unskilled workers: Low-skilled labourers; (2) Manual or assembly workers: Manual labourers and related occupations, machine assembly and operations workers; (3) Staff or skilled workers: Office staff, service and sales staff, skilled labourers in agriculture, forestry and fisheries; and (4) Leader, top or mid-level professional: Members of the armed forces, leaders/managers from sectors and organisations at different levels, high-level and average-level experts in natural sciences and technology, health care, education and training, business and management, IT and communication, legal, cultural and social affairs.
- 19.
The unexplained component is traditionally interpreted as ‘discrimination’; however, as it may capture the portion of the gap due to differences that are unmeasurable or unobserved characteristics, this chapter does not focus on this interpretation of the unexplained portion of the gap because it is difficult to interpret.
- 20.
The ‘probit’ option is available in the latest version of ‘Oaxaca’, which supports the nonlinear decomposition for binary dependent variables proposed by Yun (2004).
- 21.
Note that this figure could be an overestimation because of how we define migrants. Our definition may include in the sample of urban locals those who own a house but are long-term migrants themselves.
- 22.
Informal houses include those built: (1) on land that does not have a land-use-right certificate; (2) without obtaining a construction permit; and (3) without meeting local zoning ordinances. The informality of tenure is prevalent in self-built housing, which makes up approximately 75% of the total housing stock and production in Vietnam (World Bank 2015).
- 23.
The Vietnamese Government aims to meet a living area target of 25 m2/person by 2020.
- 24.
The 2012 Law on the Capital states that to transfer permanent residence to the capital, Hanoi, requires a rental house with a living area not smaller than 5 m2/person.
- 25.
The VHLSS dataset shows that 63% of non-working people are female and 44% are aged over 54. Note that 55 is the retirement age for women, according to the Vietnamese Labour Law. Moreover, we also find that the households with a non-working head tend to have higher family income (thanks to their pension) than those with a head who is working.
- 26.
We experimented with additional explanatory variables in the regression models, such as household size, number of children aged 0–5, 6–12 and 13–15, but none of the signs of coefficients on the variables changed. We also experimented with estimating a model with only the educational attainment variable. Its estimated coefficient was positive and significant; however, the sign switched once we added variables such as income and jobs into the model. This may suggest multi-correlation is present.
- 27.
Using Table 7, we multiplied the percentage contribution of the explained part (44.5%) with the homeownership gap (83.1 percentage points).
References
Alba, R., & Logan, J. (1992). Assimilation and stratification in the homeownership patterns of racial and ethnic groups. International Migration Review, 26, 1314–1341.
Blinder, A. S. (1973). Wage discrimination: Reduced form and structural estimates. Journal of Human Resources, 8, 436–455.
Bourassa, S. (1994). Immigration and housing tenure choice in Australia. Journal of Housing Research, 5(1), 117–137.
Bourassa, S. (1995). A model of housing tenure choice in Australia. Journal of Urban Economics, 37(2), 161–175.
Bourassa, S. C. (2000). Ethnicity, endogeneity, and housing tenure choice. The Journal of Real Estate Finance and Economics, 20(3), 323–341.
Brisson, D., & Usher, C. L. (2007). The effects of informal neighborhood bonding, social capital and neighborhood context on homeownership for families living in poverty. Journal of Urban Affairs, 29(1), 65–75.
Chatterjee, S., & Zahirovic-Herbert, V. (2011). Homeownership and housing equity: An examination of native–immigrant differences in housing wealth. International Advances in Economic Research, 17(2), 211–223.
Cu, C. L. (2009). Rural to urban migration in Vietnam. Retrieved from http://www.ide-jetro.jp/English/Publish/Download/Asedp/pdf/071_7.pdf
Dang, N. A. (2005). Internal migration: Opportunities and challenges for the renovations and development in Vietnam. Hanoi: Gioi Publishers.
Demombynes, G., & Vu, L. H. (2016). Vietnam’s household registration system. Washington, DC: World Bank Group. Retrieved from http://documents.worldbank.org/curated/en/158711468188364218/Vietnam-s-household-registration-system
Drakakis-Smith, D., & Dixon, C. (1997). Sustainable urbanization in Vietnam. Geoforum, 28(1), 21–38.
Greenacre, M. J. (1993). Correspondence analysis in practice. London: Academic.
Hardy, A. (2001). Rules and resources: Negotiating the household registration system in Vietnam under reform. Sojourn, 16(2), 187–212.
Hartley, L., & Lam, Q. T. (2008). Mapping urban poverty in Ho Chi Minh City. Banbury: Habitat for Humanity.
Jann, B. (2008). The Blinder–Oaxaca decomposition for linear regression models. Stata Journal, 8(4), 453–479.
Kabeer, N., Tran, T. V. A., & Vu, M. L. (2005). Preparing for the future: Forward-looking strategies to promote gender equity in Vietnam. United Nations/World Bank Thematic Discussion Paper. Retrieved from http://www.undp.org/content/dam/vietnam/docs/Publications/22102_5655_gp-e.pdf
Kain, J. F., & Quigley, J. M. (1972). Housing market discrimination, homeownership, and savings behavior. American Economic Review, 62, 263–277.
Krivo, L. J. (1995). Immigrant characteristics and Hispanic–Anglo housing inequality. Demography, 32, 599–615.
Le, B. D. (1998). State, economic development, and internal migration in Vietnam. Unpublished PhD dissertation, Binghamton University, New York.
Le, B. D., & Nguyen, T. L. (2011). From countryside to cities: Socio-economic impacts of migration in Vietnam. Hanoi: Workers’ Publishing House.
Li, M. M. (1977). A logit model of homeownership. Econometrica, 45(5), 1081–1097.
Lim, G.-C., Follain, J. R., & Renaud, B. (1980). The determinants of homeownership in a developing economy. Urban Studies, 17, 13–23.
Marx, V., & Fleischer, K. (2010). Internal migration: Opportunities and challenges for socio-economic development in Vietnam. Hanoi: United Nations Vietnam.
Neumark, D. (1988). Employers’ discriminatory behaviour and the estimation of wage discrimination. Journal of Human Resources, 23(3), 279–295.
Nguyen, L. T., & White, M. (2007). Health status of temporary migrants in urban areas in Vietnam. International Journal of Migration, 45(4), 101–134.
Oaxaca, R. L. (1973). Male–female wage differentials in urban labor markets. International Economic Review, 14, 693–709.
Oaxaca, R. L., & Ransom, M. R. (1994). On discrimination and the decomposition of wage differentials. Journal of Econometrics, 61, 5–21.
Painter, G., Gabriel, S. A., & Myers, D. (2001). Race, immigrant status, and housing tenure choice. Journal of Urban Economics, 49(1), 150–167.
Phe, H. H. (2002). Investment in residential property: Taxonomy of home improvers in central Hanoi. Habitat International, 26, 471–486.
Quang, N., & Kammeier, H. D. (2002). Changes in the political economy of Vietnam and their impacts on the built environment of Hanoi. Cities, 19(6), 373–388.
Tipple, A. G., & Willis, K. G. (1991). Tenure choice in Kumasi, Ghana. Third World Planning Review, 13, 27–45.
Tran, H. A., & Dalholm, E. (2005). Favoured owners, neglected tenants: Privatisation of state owned housing in Hanoi. Housing Studies, 20(6), 897–929.
Ulker, A. (2008). Household composition and housing expenditures in rental-occupied and owner-occupied markets. Family and Consumer Sciences, 36(3), 189–207.
United Nations Economic, & Social Commission for Asia and the Pacific (UNESCAP). (2009). Regional trends, issues and practices in urban poverty reduction: Social protection in Asian cities. ST/ESCAP/2570. Bangkok: UNESCAP. Retrieved from http://eprints.lse.ac.uk/31402/1/trends_urban.pdf
Wachter, S., & Megbolugbe, I. (1992). Racial and ethnic disparities in homeownership. Housing Policy Debate, 3(2), 333–370.
Waibel, M., Eckert, R., Bose, M., & Volker, M. (2007). Housing for low income groups in Ho Chi Minh City, between re-integration and fragmentation. Asien, 103, 59–78.
Wang, F., & Zuo, X. (1999). Association inside China’s cities: Institutional barriers and opportunities for urban migrants. American Economic Review, 89(2), 276–280.
World Bank. (2015). Vietnam affordable housing: A way forward. Washington, DC: The World Bank.
World Bank. (2016). Vietnam’s household registration system. Washington, DC: The World Bank.
Yun, M.-S. (2004). Decomposing differences in the first moment. Economics Letters, 82, 275–280.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Nature Switzerland AG
About this chapter
Cite this chapter
La, H.A., Tran, T.B., Nguyen, U. (2019). Housing Gaps Between Rural–Urban Migrants and Local Urban Residents: The Case of Vietnam. In: Liu, A., Meng, X. (eds) Rural-Urban Migration in Vietnam. Population Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-94574-3_9
Download citation
DOI: https://doi.org/10.1007/978-3-319-94574-3_9
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-94573-6
Online ISBN: 978-3-319-94574-3
eBook Packages: Economics and FinanceEconomics and Finance (R0)