NATIONAL ECONOMIC UNIVERSITY BACHELOR BUSINESS ADMINISTRATION IN ENGLISH BUSINESS RESEARCH METHODOLOGY RESEARCH PROPOSAL Topic: Determinants affecting the intent to buy social insurance of informal labor in urban area of Vietnam – A case study in Hanoi Instructor: Assoc Prof Dr Le Thi My Linh Ha Noi, Oct, 2019 CONTENT I Rationale As the world has become more and more developed and innovative, there are more and more uncertain risks suddenly popping up and causing severe consequences It is the same situation in Vietnam when the economy is on the rise, income per capita compared to other countries in the region has increased significantly People's living standards have been gradually improved As a result, the need for security or insurance has been rising significantly Social Insurance Law (2006) was issued and takes effect from 2007 However, the voluntary social insurance has been applied since 2008 Social insurance is a basic policy in the social security system (social security) of each country In Vietnam, the development of the social insurance system (social insurance) and the construction of voluntary social insurance (unemployment insurance) is one of the main solutions to develop the social security system This is also the first law in Vietnam to institutionalize at a high level a very basic demand for social security of the citizens According to the Vietnam Social Insurance agency, at the end of 2015, the number of people participating in social insurance was 12,319,866 people, an increase of 5.79% compared to 2014 In which, the obligatory social insurance participants were 12,065,223 people, an increase of 5.35% over the same period in 2014 and the number of people participating in social insurance is 254,643 people, an increase of 31.71% However, the number of employees participating in the social insurance as above is less than 0.4% of employees joining the social insurance Thus, there is still a very large part of workers not participating in social insurance that cannot access this service Most of them are labor of the informal sector The informal economy, informal sector of the economy, or grey economy is the part of an economy that is neither taxed nor monitored by any form of government Although the informal sector makes up a significant portion of the economies in developing countries, it is often stigmatized as troublesome and unmanageable However, the informal sector provides critical economic opportunities for the poor and has been expanding rapidly since the 1960s Integrating the informal economy into the formal sector is an important policy challenge The type of work making up the informal economy is diverse, particularly in terms of capital invested, technology used, and income generated Workers in the informal sector, even those are self-employed or wage workers, are mostly inaccessible to secure work, benefits, welfare protection, or representation According to the General Statistics Office, Vietnam currently has more than 18 million employees doing informal jobs accounting for 57% of the total non-farm employment in country However, up to 97.9% of workers not have social insurance This poses a great concern for the nation in terms of social security as the social insurance coverage has not been best improved On implementing the Party's orientation and the State's law on ensuring universal social security, the development of voluntary social insurance of workers in the informal sector has been implemented in our country quite early, the Social Insurance Law of 2006 stipulates implementation from 2008, amended in 2014, the Government issued Decree No 134 / ND-CP, dated December 29, 2015 detailing voluntary social insurance, the Ministry of Labor Invalids and Social Affairs issued Circular No 01, dated 18/02/2016 providing detailed guidelines for implementation of voluntary social insurance The system of legal documents on voluntary social implementation insurance process still is quite faces adequate, many but the difficulties and shortcomings We believe that the development of the coverage of social insurance can better guarantee the life standard as well as security of the people This goal can be obtained by focusing on enlarging the popularity of social insurance among labor from the informal factor To back up our opinion, we had looked for some literature, yet the most of them focus on the participation of insurance, the determinants affecting the ITB of people in general but not those in informal labor sector Therefore, we decide to study further about the determinants influencing the intent to buy (ITB) for social insurance of the informal labor sector in Vietnam’s urban areas, where most of the workers from the sector settle down II Research objectives On conducting the research, our group aims to figure out three following goals related to the social insurance enrolment in informal labor sector in urban areas of Vietnam, which are, the situation, the determinants affecting ITB, how each factor affects these two variables, and possible proposed solutions III Research questions This research is designed to answer the following questions: What is the current status of the social insurance coverage among labor from informal sector in urban area? What are the determinants affecting the ITB for social insurance of the informal labor sector in Vietnam’s urban areas? What is the interaction between ITB? What are the recommendations for social policy maker? IV Literature review Following are the summaries of some typical studies related to the interested topic in Vietnam and worldwide: Domestic Researches (analyze, evaluate the situation of • research in the field of the topic in Vietnam) “Factors influencing the intention to subscribe to voluntary social insurance of farmers: A case study in Phu Yen Province” Hoang Thu Thuy, Bui Hoang Minh Thu (2018) Science & Technology development journal: Economics – Law and management, Vol 2, Issue 4, 2018 Based on the Theory of Reasoned Actions of Ajzen and Fishbein (1985), the study proposes the model of the links between decisive factors and the intent to buy voluntary social insurance of farmers in Phu Yen province In order to verify the factors affecting the intention to subscribe to voluntary social insurance, the study used the primary data collected from the survey on 325 famer households in localities in Phu Yen province Initially employing a model with variables, the authors found out the dependent variable – the intent to buy, is determined by main factors, namely, “Awareness of voluntary social insurance policy”, “Attitude towards subscription”, “Risk awareness”, “Subscription procedures”, and “Moral responsibility” On recognizing the relation between the key determinants and the intent to buy, the study suggests renewing organizing quality, raising farmers’ awareness of the necessity for voluntary social insurance, improving policy mechanisms and strengthening the State’s management • “Analyze factors affecting to attendance of health insurance of the objects in Tra Vinh province”.Nguyen Thi Dan Phuong Master thesis, Tra Vinh University, 2015 The research proposes and verifies the determinants influencing the intent to buy health insurance The study was conducted based on the information compiled from the opinions of experts in the seminar on the implementation of universal health insurance coverage by Universal Health Insurance Steering Committee of Tra Vinh province that held and performed a survey to get the opinions of experts in the field of health insurance The author constructed a model of 10 factors, then performed surveys of 460 households Consequently, after analyzing the data, the results showed that factors affects to attendance of health insurance of the objects in Tra Vinh province on a level from high to low, which are: “Understanding of health insurance”; “Quality of examination and treatment of health insurance”; “Health status”; “The fee on health insurance”; “Procedures for records of purchase health insurance and payment for the costs of examination and treatment of health insurance”; “Procedures of registration and examination and treatment of health insurance”; “Income”, “People’s living standards” • “Some factors that have an effect on the Interest of participating in Voluntary Social Insurance of Small traders in Nghe An province” Nguyen Xuan Cuong, Nguyen Xuan Tho, Ho Huy Tuu Vietnam National University Journal of Science, Economics and Business, Vol 30, Issue (2014) 36-45 Aiming to discover and analyze the factors that affect the interest of participating in voluntary social insurance by small traders in Nghe An province On reviewing theories of consumer behavior such as TRA and TPB, the research indicates seven variables that have a significant statistical influence on the interest of participating in voluntary social insurance, which are: “propagation of voluntary social insurance”, “health awareness”, “knowledge of voluntary social insurance”, “attitude”, “family expectation”, “moral obligation” and “behavior control” Of these factors, results show that propagation of voluntary social insurance plays the most important role in deciding the intent to buy insurance • “Factors affecting the participation social insurance of informal labor” Hoang Bich Hong, Mai Thi Huong, To Thi Hong Social Insurance Journal, Issue 3B, 2017 In order to measure and evaluate the intention and behavior of voluntary social insurance participation of workers in the informal sector, the research team approached, studied and applied the theory and model of behavior such as Theory of Consumer Behavior; Attitude theory including models of Schiffman and Kanuk - 1987, model reasoned action theory TRA of Ajzen and Fishbein -1987, model of theory of planned behavior - TPB of Ajzen -1991 The study was conducted in a sample of 342 labors of informal sector It verified the model of 10 independent variables including: “attitude towards participation”, “family expectation”, “income”, “risk awareness”, “social influence”, “health awareness”, “propaganda of social insurance”, “moral responsibilities”, “knowledge about social insurance” The results of the survey and data processing show that factors of moral responsibilities and propaganda of social insurance are the two factors that most influence the intention of participating in social insurance of workers in the informal sector In addition, low educational levels also hinder the understanding of social insurance policies, as well as the awareness of employees' moral responsibilities Foreign researches: • • “Determinants of enrolment in the NHIS (the National Health Insurance Scheme) for women in Ghana – a cross sectional study” Anthony Kusi, Ama Fenny, Daniel Kojo Arhinful, Felix Ankomah Asante, Divya Parmar International Journal of Social Economics Vol 45 No.9, 2018 pp 1318-1334 This paper was carried out on the purpose of exploring whether dimensions of social exclusion explain the reason for the fact that some groups of women are not benefiting from the scheme Data collected from 4,050 representative households in five districts verify the proposed model of main factors deciding enrolment into the scheme, namely, “wealth status”; “age”; “health status”; “locality”; “perception about the quality of care at health facilities and perception of the NHIS” The study provide evidence to show that certain groups of women are systemically excluded from participating in the NHIS “System and neural network analysis of intent to buy and willingness to pay insurance premium”.Sanjay Tolani and Ananth Rao, Genanew B Worku, Mohamed Osman Managerial Finance, Vol 45 No 1, 2019 pp 147-168 With the goal of analyzing significant determinants to assess the probability of insureds’ intent to buy (ITB) insurance and willingness to pay (WTP) quantum of dollars for security benefits By applying Double Hurdle Model and Neural Network architecture to 503 insureds of a branch of a leading insurer in the United Arab Emirates, the research constructs a model building up with key variables, which are: “awareness of social security”; “ability to recover from a loss”; “perceived personal control”; “behavioral tendency”; “demographic variables” After verifying the model, the results suggest that marketing managers target insureds who are aware of social security, have ability to recover from loss, have perceived personal control, behave rationally and have favorable demographic features to enhance their ITB and WTP • “The influence of behavioral factors on insurance decision – a Romanian Approach” Cristian Buzatu International Economic Conference of Sibiu 2013 Post Crisis Economy: Challenges and Opportunities, IECS 2013 Procedia Economics and Finance (2013) 31-40 The paper presents the action of behavioral factors on the decisions regarding the insurance against certain event By analyzing the elements that determine a person who should be covered against a risk, not to buy insurance and the reverse situation when, the author suggests a general approach of behavioral factors leading to insurance decision: “risk perception”; “biases”; “models of decision making”; “mental accounts”; “the influence of emotions”; “information availability” and “social norms” Summary of the relevant researches – typical outcomes: Of all researches reviewed, many factors have been investigated to find out the links between them and the intention to buy insurance Although each research analyzes different group of determinants, the majority of them confirm the following factor: awareness of social security or level of information available (Sanjay Tolani and Ananth Rao, 2018; Anthony Kusi, 2017; Hoang Thu Thuy and Bui Hoang Minh Thu, 2018), ability to recover from loss (Sanjay Tolani and Ananth Rao, 2018), perceived personal control (Sanjay Tolani and Ananth Rao, 2018), behavioral tendency (Sanjay Tolani and Ananth Rao, 2018; Anthony Kusi, 2017; Hoang Thu Thuy and Bui Hoang Minh Thu, 2018), socio-demographic factors (Sanjay Tolani and Ananth Rao, 2018; Anthony Kusi, 2017; Do Hoang Anh and Pham Hong Manh, 2019), “Moral responsibility” (Hoang Thu Thuy and Bui Hoang Minh Thu, 2018; Do Hoang Anh and Pham Hong Manh, 2019), “Risk awareness” (Hoang Thu Thuy and Bui Hoang Minh Thu, 2018) However, there exists some shortcomings that need to be tackled: • • In term of the subject of the study, most of the studies only focus on the population of a specific area, for example a province, a country, yet less notice on the labors of different economic sectors as well as sociodemographic area In term of topic, most of the studies pay much attention on insurance in general or health insurance in particular However, the voluntary social insurance seems to be less noticed V Theoretical framework and research hypotheses Theoretical framework On considering multiple influencing variables in different research models, our group decided to hypothesize that the set of determinants including attitude towards social insurance enrolment, behavioral tendency, level of information available, risk perception, subjective social norms, and other demographic factors affect ITB at the same time The following figure represents the theoretical framework: Figure Theoretical framework We have the table of variables’ origin: Number Feature Attitude towards social insurance enrolment Behavioral tendency Level of information available Items Interested when enroll in voluntary social insurance Satisfied with social insurance policies satisfied with the benefits brought by social insurance enough ability and knowledge when participate social insurance Subscribe to social insurance in next week No obstacles preventing subcribing to social insurance Know about social insurance through social media Know about social insurance through those who already take part in social insurance Know about social insurance through staff of insurance company Sources Hoang Thu Thuy, Bui Hoang Minh Thu (2018); Nguyen Xuan Cuong, Nguyen Xuan Tho, Ho Huy Tuu (2014); Hoang Bich Hong, Mai Thi Huong, To Thi Hong (2017) Hoang Thu Thuy, Bui Hoang Minh Thu (2018);Nguyen Xuan Cuong, Nguyen Xuan Tho, Ho Huy Tuu (2014); Sanjay Tolani and Ananth Rao, Genanew B Worku, Mohamed Osman (2019) Hoang Thu Thuy, Bui Hoang Minh Thu (2018); Nguyen Xuan Cuong, Nguyen Xuan Tho, Ho Huy Tuu (2014); Hoang Bich Hong, Mai Thi Huong, To Thi Hong (2017); Sanjay Tolani and Ananth Rao, Genanew B Worku, Mohamed Osman (2019) Know about social insurance through local events Sudden events increase Risk perception Many financial risks when participating social insurance Uncertain about benefits brought social insurance Subjective social norms the by Hoang Thu Thuy, Bui Hoang Minh Thu (2018); Nguyen Xuan Cuong, Nguyen Xuan Tho, Ho Huy Tuu (2014); Hoang Bich Hong, Mai Thi Huong, To Thi Hong (2017); Sanjay Tolani and Ananth Rao, Genanew B Worku, Mohamed Osman (2019); Cristian Buzatu (2013) Unwilling to live on the money given by my Hoang Thu Thuy, Bui Hoang Minh children when I'm old Need for a stable Thu (2018); Nguyen Xuan Cuong, Nguyen Xuan Tho, Ho Huy Tuu income at the old age (2014); Hoang Bich Hong, Mai Thi Social insurance Huong, To Thi Hong (2017); Sanjay participation as a way of Tolani and Ananth Rao, Genanew B showing reponsibility Worku, Mohamed Osman (2019) A preparation for life after retirement Health status Demographi c factors Income Age Gender Sanjay Tolani and Ananth Rao, Genanew B Worku, Mohamed Osman (2019); Anthony Kusi, Ama Fenny, Daniel Kojo Arhinful, Felix Ankomah Asante, Divya Parmar (2018) Research hypotheses In this research, attitude towards social insurance enrolment (ATSIE) refers to opinions about the benefits of social insurance and their viewpoints for or against it As the point of view of the participants can directly affect the ITB social insurance, we hypothesize: H1+: Attitude towards social insurance enrolment has a positive impact on ITB If one has a criminal background, it somehow shows the insured’s attitude toward the law, which influences his ITB Thus, we have the below hypothesis: H2+: Labor’s BT has a negative effect on ITB Level of information available means the acknowledgement about insurance program as well as other information related to social insurance such as its importance, its benefits Obviously, the more one knows about the insurance, the more likely he will consider participating Hence, we have: H3+: Level of information available has a positive relation with ITB It is undeniable to state that when one is unsecured or pessimistic about his future, he has a high demand for a social insurance program At the same time, if the insured feel it too risky to take part in an insurance program, he will likely to stop enrolling Thus, we hypothesize: H4-: Risk perception (RP) has a negative impact on ITB When it comes to subjective social norms (SSN), it refers to the belief of the labor about the responsibility for himself and his family If he supposes that it is obvious for children to take care of his parents when they get old, then he will unlikely to have any intention of social insurance participation Hence, we have: H5+: Subjective social norms (SSN) has a positive impact on ITB Moderating variables – demographic factors (DF) and POI, POE Age, gender, marital status all has definite influence on the relation between independent variables above and Intent to buy For instance, it is clear that marital status of a labor impact the spouse’s influence on the ITB Thus, we hypothesize: H6: The labor demographics have a significant (either + or -) effect on ITB VI Research Methodology We propose to empirically test the model in the Vietnamese context, focus on only city Hanoi In the current conditions of our country, the social security system cannot cover all large social groups in big cities, especially Hanoi - where many social strata are concentrated The more highly developed the economy is, the more activities there are of informal workers Some people have not had access to the social welfare system yet In addition, this city has received a large number of immigrants (including both short-term and long-term residents), most of whom are rural residents pouring into urban areas to seek employment in the process urbanization These people are also outside the coverage of the social security system Therefore, our research team decided to conduct research in Hanoi Population and sample On deciding the area of the research, we looked for the statistics of the population The population of the study is defined as all labor in urban areas from informal sector in Vietnam According to the General Statistics Office (2016), the number of informal labors is about 18 million nationwide In urban areas, there are 7273.3 thousand people working in informal labor sector, which is also the scale of the population And the number of informal workers in the selected area (Hanoi) in Vietnam was 1642.4 thousand Based on these data, we propose that the sample size for this study will be 400 Study design: • • Sample size: 400 Qualitative preliminary research: Using hand-to-hand and group discussion methods to help build variables that can • • affect ITB as the basis for formation original questionnaire Distribute the initial survey to 30 workers Re-form the questionnaire from the original questionnaire in combination with the surveyed individuals so that the questionnaire is complete and approach to the most • variables The original questionnaire will be developed in Vietnamese and later translated into English The versions of the questionnaire in Vietnamese and English will be guaranteed to mean the same thing Data collection Data measurement: We propose to use the questionnaire for the survey As far as we are known, surveys will be more workable than interviews or observations It allows us to collect easily and get more data In the industry targeted, we will distribute questionnaires to all laborer These workers have been and will be directly involved in social insurance - the best location for research, and they will better understand the subject To be specific, in each ward, 200 questionnaires will be given to the workers of informal sector with the help of authorities Data collection: • Ask the offices of the district people's committees to provide places where many informal workers concentrated (trade, repair, construction, etc.) are • Conduct surveys of individuals in the locations provided in • districts To ensure the best response rate, we will give the questionnaire in Vietnamese for each individual and guide them to use this questionnaire in the best way Data processing techniques and methods: Conducted through the official survey questionnaire Data analysis will be performed using Statistical Package for the Social Sciences (SPSS) computer software package: • Analyzing the reliability of concepts by Cronbach's alpha • coefficient Analyze the EFA factor for all indicators to determine whether the indicators produce the intended number of factors, as well as consider indicators are there big factor weight on the intended concept, and reliability is also • recalculated for the final scales Linear regression analysis, ANOVA to test hypotheses VII Scope of the study The study will be conducted in Hanoi – a typical urban area of Vietnam Our group choose to focus on two representative places in Hanoi, which are: Quynh Mai ward of Hai Ba Trung district and O Cho Dua ward of Dong Da district Theses two wards consist many workers of informal sector settling down The study will also focus on workers who work in small businesses, and those are freelancers, which account for approximately 34.7% and 36.0% of total residents in two places (Do Minh Khue, 2007) VIII Limitations of the research In the process of doing research and writing the topic " Determinants affecting the intent to buy social insurance of informal labor in urban area of Vietnam – A case study in Hanoi", we noticed some limitations: Firstly, the ability to generalize is not high The research was only conducted for the sample of workers in the informal sector in Hanoi, so the ability to generalize is not high The possibility of generalization will be higher if this study is conducted to choose sample in many other provinces and cities of Vietnam This is a direction for further research Secondly, the representativeness of the sample is not high The research (convenient used sampling non-probability method), sampling which led to method a low representative of the sample In the next studies, if conditions of time and ability are available, we will choose the probability sampling method It will be more representative and generalized IX Proposed time frame Oct.05 - Nov.05: Review literature Nov.05 - Dec.05: Finalizing the survey instrument and conduct surveys Dec.05 - Mar.19: Collecting data Mar.19 - Aug.19: Process collected data Aug.19 - May.19: Writing report X References Anthony Kusi, Ama Fenny, Daniel Kojo Arhinful, Felix Ankomah Asante, Divya Parmar (2018), “Determinants of enrolment in the NHIS for women in Ghana – a cross sectional “, International Journal of Social Economics, Vol.45, No.9, 2018 Do Hoang Anh , Dr Pham Hong Manh (2019) “ Factors influencing study people's decision to participate in life insurance in Quang Ngai City”, Finance Journal 1/2/2019 Do Minh Khue and partner (2007), “ Social security issues of labor in the informal sector in urban areas ”, Institute of Sociology, Vol Hoang Thi Bich Hong, Mai Thi Huong, To Thi Hong (2017) “Factors affecting the participation social insurance of informal labor”, Social Insurance Journal, Issues 3B, Insurance department - University of Labour Social Affairs Hoang Thu Thuy, Bui Hoang Minh Thu (2018) “Factors influencing the intention to subscribe to voluntary to social insurance of farmers: A case study in Phu Yen province”, Science & Technology development journal: Economics – Law and management, Vol 2, Issue Le Canh Bich Tho, Vo Van Tuan, Truong Thi Thanh Tam (2017) “ Factors affecting the decision to buy voluntary health insurance of the people in Can Tho city ”, Science Journal of Can Tho University , Vol 48, Issue D , 20-25 Nghiem Xuan Nam (2009) “ Situation and needs to participate in health insurance of people in rural area nowadays ”, Hanoi National University, Master thesis in Sociology 8 Nguyen Duy Chinh, Nguyen Thanh Sơn, Lai Nhat Duy (2016) “Factors affecting farmers' decision to participate in rice insurance in Can Duoc district, Long An province ” , Science Journal of Ho Chi Minh City Open University, Vol 50 (5) Nguyen Thi Dan Thuong ( 2015) “ Analyze factors affecting to attendance of health insurance of the objects in Tra Vinh province ”, Master thesis, Tra Vinh University 10 Nguyen Tuyet Mai (2015), “ Factors affecting the intention to participate in voluntary social insurance of small traders in Rach Gia city ”, Nha Trang University 11 Nguyen Xuan Cuong, Nguyen Xuan Tho, Ho Huy Tuu “Some factors that have an effect on the Interest of participating in Voluntary Social Insurance of Small traders in Nghe An province” Vietnam National University Journal of Science, Economics and Business, Vol 30, Issue 1(2014), 12 36-45 Sanjay Tolani and Ananth Rao, Genanew B Worku, Mohamed Osman (2018) “System and neural network analysis of intent to buy and willingness to pay insurance premium “, Managerial Finance, Vol.45, No.1, 2019 13 Sanusi Bintang, Mujibussalim Mujibussalim, Fikri Fikri (2019) “Decentralization of Indonesia social health insurance “, International Journal of Law and Management, Vol.61, No.2, 2019 Faculty of Law, Universitas Syiah Kuala, Banda Aceh, Indonesia 14 General Statistical Office (2016), Report of informal labor 2016, Publisher Hong Duc  ... in the social security system (social security) of each country In Vietnam, the development of the social insurance system (social insurance) and the construction of voluntary social insurance. .. subcribing to social insurance Know about social insurance through social media Know about social insurance through those who already take part in social insurance Know about social insurance through... participating in social insurance that cannot access this service Most of them are labor of the informal sector The informal economy, informal sector of the economy, or grey economy is the part of an economy