Environmental income and remittances: Evidence from rural central highlands of Vietnam

Abstract

Extraction of environmental resources and migration are closely related livelihood strategies of rural households in developing countries. Therefore, a deeper understanding of the relationship between environmental income and remittances is needed to lower the existing pressure on environmental resources and to promote rural development. This study aims at investigating this relationship by using panel data at the household and village levels collected in 2013, 2016, and 2017 from three provinces in the Central Highlands of Vietnam. A Heckman model is applied to identify the factors of the decision to send remittances. A fixed effects two-stage least squares analysis is conducted to investigate the determinants of environmental income and a quantile regression shows the distribution of effects. The findings reveal differences between asset-poor and -rich households. Since the former are often more dependent on labour-intensive livelihood strategies such as extraction, a decrease in household labour due to migration leads to reduced extraction. For asset-rich households who are normally less capital-constrained, remittances lead to more extraction of natural resources. The findings support the claim for encouraging rural labour markets and education, especially for asset-poor people, and for a sustainable and collective natural resource management.