Impact of remittances on the households expenditure structure in Vietnam

Abstract

Since the Vietnamese economic reform called “Doi Moi” in 1986, Vietnam has witnessed a blooming in economy as well as the huge remittances flow from the internal and external migrants. Many researches choose the remittances behavior for their study. Learning from the way people send back their income and the way people in the homeland use this source of financial support is not only support the valuable theory about remittances, but also bring out a practical experiment for one of the developing economy, Vietnam. Using the VHLSS 2012 data, this study explore the relationship between remittances and the six categories of household expenditure. These categories are food product, non-food (consider for the consumer goods), medical services, education payment, housing facilities payment, durable goods. The method using is Tobit regression for the education factor, and OLS for the other. Our results show that overall, remittances have statistically significantly impact for food, housing, durable and the medical expenditure. Meanwhile, consumption of remittance recipient households is not different from non-recipient households.