Internal migration has several policy implications for economic growth and
development for developing countries in general and for the fast growing
low-income country of Vietnam in particular. Little research has been done,
however, on inter-provincial migration in Vietnam. This study makes two
major contributions to the migration and development literature in terms of
the datasets and policy-relevant estimation approach. It is the first paper to
use the annual survey data on migration published by Vietnam’s General
Statistics Office. This study also adopts a functional form to accommodate the
flexibility of income’s elasticity. Income, together with urban unemployment
rates, are endogenously estimated with instruments that prove to be strong
and valid. The inclusion of policy-relevant variables provides empirical
findings that can make migration policy in Vietnam better-informed. Specifically,
Vietnamese migrants are influenced primarily by moving costs, expected
income differentials, disparity in the quality of public services offered
by provinces, and the demographic composition at destination and source.
This paper’s findings provide new insight for migration policy options, and
suggest that the government adopt a holistic policy approach to maximize
the benefits and minimize the costs associated with internal migration.