TY - JOUR

T1 - Non-farm employment, natural resource extraction, and poverty

T2 - evidence from household data for rural Vietnam

AU - Do, Manh Hung

AU - Nguyen, Trung Thanh

AU - Halkos, George

AU - Grote, Ulrike

N1 - Funding Information: The authors would like to thank the respondents from the surveyed provinces for their kind support and cooperation. We highly acknowledge the financial support of the German Research Foundation (DFG FOR 756) for the TVSEP project and appreciate the efforts of our colleagues at the Leibniz University Hannover for data collection and cleaning. MH Do would like to thank the German Academic Exchange Service (DAAD) for financial assistance. We thank the participants of the 6th Conference “Economics of Natural Resources and the Environment” organised by the University of Thessaly (11.–12.06.2021) for their comments to improve our study. We greatly acknowledge the constructive comments from two anonymous reviewers.

PY - 2022

Y1 - 2022

N2 - Natural resources are important in sustaining the livelihoods of rural households and the environment. However, over-exploitation is causing an alarming depletion of natural resources in many developing countries. At the same time, rapid economic growth has created non-farm employment opportunities for local people. In this context, examining the interrelationship between non-farm employment and natural resource extraction provides useful information for reducing resource extraction and improving rural households’ welfare. In this study, we use a dataset of 1780 identical households from three survey waves undertaken in 2010, 2013, and 2016 in Vietnam to (i) identify the determinants of rural households’ participation in non-farm activities, (ii) examine the interrelationship between non-farm employment and natural resource extraction, and (iii) investigate the impact of non-farm employment on rural households’ welfare. The findings from pooled sample estimations reveal that (i) cable internet at home and rural road quality positively affect households’ decisions to participate in non-farm employment; (ii) non-farm income and income from natural resource extraction have a negative association; and (iii) non-farm income significantly contributes to poverty reduction in both relative and absolute terms. Our findings suggest that improved provision of non-farm opportunities and increased investment in infrastructure and telecommunication are needed to improve rural households’ welfare and consequently reduce their natural resource exploitation.

AB - Natural resources are important in sustaining the livelihoods of rural households and the environment. However, over-exploitation is causing an alarming depletion of natural resources in many developing countries. At the same time, rapid economic growth has created non-farm employment opportunities for local people. In this context, examining the interrelationship between non-farm employment and natural resource extraction provides useful information for reducing resource extraction and improving rural households’ welfare. In this study, we use a dataset of 1780 identical households from three survey waves undertaken in 2010, 2013, and 2016 in Vietnam to (i) identify the determinants of rural households’ participation in non-farm activities, (ii) examine the interrelationship between non-farm employment and natural resource extraction, and (iii) investigate the impact of non-farm employment on rural households’ welfare. The findings from pooled sample estimations reveal that (i) cable internet at home and rural road quality positively affect households’ decisions to participate in non-farm employment; (ii) non-farm income and income from natural resource extraction have a negative association; and (iii) non-farm income significantly contributes to poverty reduction in both relative and absolute terms. Our findings suggest that improved provision of non-farm opportunities and increased investment in infrastructure and telecommunication are needed to improve rural households’ welfare and consequently reduce their natural resource exploitation.

KW - Heckman selection model

KW - Instrumental variable

KW - Rural livelihood

KW - Simultaneous regression model

UR - http://www.scopus.com/inward/record.url?scp=85130730237&partnerID=8YFLogxK

U2 - 10.1007/s10668-022-02391-7

DO - 10.1007/s10668-022-02391-7

M3 - Article

AN - SCOPUS:85130730237

JO - Environment, Development and Sustainability

JF - Environment, Development and Sustainability

SN - 1387-585X

ER -