Social Networks and the Move Between Farming and Non-Farm Self-Employment in Rural Vietnam
A study co-authored by Chung Thanh Phan (HAPRI Research Associate), Devmali Perera, Richard Ramsawak and Tra Pham finds that social networks tend to deter rural Vietnamese households from moving out of farming into non-farm self-employment, and instead promote the movement from non-farm activities to farm-based activities. The findings shed light on the impact of social networks on the economic choices of households in rural Vietnam.
Context
Non-farm self-employment is described by the authors as a critical safeguard for rural communities: it helps households cope with income fluctuations caused by unexpected shocks and contributes to the overall enhancement of household well-being. Several factors influence whether rural households pursue it.
Past research has shown a positive relationship between social networks and the choice of non-farm self-employment. The authors set out to understand how these networks affect the economic shift from agriculture-centric occupations to diversified non-farm roles.
Methods
The study draws on the Vietnam Access to Resources Household Survey, which covers a representative sample of rural households across key provinces of Vietnam. The authors examine both the size and the quality of households' social networks, and use a heteroscedasticity-based instrumental variable model to assess household decisions to transition between farming and non-farm self-employment.
Key findings
The size and quality of households' social networks significantly influence the choice of non-farm self-employment in rural Vietnam.
Social networks tend to deter the transition from farming to non-farm self-employment.
Instead, social networks promote the movement from non-farm activities to farm-based activities.
Social networks also provide better access to credit and higher income for households engaged in farm-based activities, but do not significantly benefit households engaged in non-farm self-employment.
Policy implications
The authors say these findings offer valuable insights for policymaking aimed at poverty reduction and enhancing the income-generating capacity of rural families, particularly in rural Vietnam.
Keywords:
Vietnam
Social Networks
Non-Farm Self-Employment
Rural Households
Credit Access
Rural Livelihoods
Link:
Citation:
Phan, C. T., Perera, D., Ramsawak, R., & Pham, T. (2025). The impacts of social network on non-farm self-employment: Evidence from Vietnam. Journal of Rural Studies, 114, 103530.
