How can promoting desirable elderly employment opportunities alleviate the shortfalls of Thailand’s ageing society?

Phijaisanit, Euamporn (2015): How can promoting desirable elderly employment opportunities alleviate the shortfalls of Thailand’s ageing society? Published in: Thammasat Review of Economic and Social Polilcy , Vol. 1, No. 2 (2016): pp. 124-171.

Abstract

This research article considers a simulated scenario in which there exists policy infrastructure that promotes employment options to support desirable life after retirement with fiscal sustainability. Two proposed “demo” policy tools, among many others, include (1) legislative flexibility in employment and (2) tax incentives for employers. These measures aim at encouraging employment structure with working conditions favorable for elderly workers. The results of the simulation imply that, given suitable working conditions, a minimum of 50% of the potential elderly workforce participating in the market can yield marginal annual income of approximately 44,268 - 165,295 Baht per elderly worker and approximately 4.74 - 9.35% GDP increase from the baseline GDP growth with ageing population structure. Moreover, the estimated possible minimum marginal net tax revenue is approximately 33,279- 65,994 million Baht. This marginal government revenue, if allocated to old-age expenditure, amounts to approximately 4,000 Baht per elderly per year. The proposed scenario with policy infrastructure that encourages elderly labor participation in the economy constitutes a self-funded model with fiscal sustainability and represents a win-win scenario. Nevertheless, the success of implementing such policy tools depends on the understanding, co-operation and synchronization among the Thai public institutions as well as all parts of the society.

• Item Type: MPRA Paper
• Language: English
• Keywords: ageing society, policies for old-age employment options, fiscal sustainability
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H27 - Other Sources of Revenue; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents

References

Advisory Council on National Labor Development (2013). Research Project on the Promotion of Job Opportunities for the Elderly. Office of Permanent Secretary, Ministry of Labor. (in Thai).

Bell, D. N. F. & Rutherford, A. C. (2013). Older workers and working time. Discussion Paper No.7546, Forschungsinstitut zur Zunkunft der Arbeit (Institute for the Study of Labor), August.

Block, J. & Koellinger, P. (2009). I can’t get no satisfaction- Necessity entrepreneurship and procedural utility. Kyklos, 62(2), 191-209.

Borsch-Supan, A. & Schnabel, R. (1998). Social security and declining labour force participation in Germany. American Economic Review, 88 (2), 173-8.

Borsch-Supan, A. & Schnabel, R. (2010). Early retirement and employment of the young in Germany, In (Eds.) J. Gruber and D. A. Wise Social security and retirement around the world: The Relationship to Youth Employment, 147-166. Chicago: University of Chicago Press.

Borsch-Supan, A. & Weiss, M. (2013). Productivity and age: evidence from work teams at the assembly line. MEA Discussion Paper 07148, Munich Center for the Economics of Ageing (MEA), Max Planck Institute for Social Law and Social Policy.

Bosworth, B. (2005). Economic Growth in Thailand: A Macroeconomic Context. Paper Prepared for a World Bank Project on Investment Climate, Firm Competitiveness and Growth.

Chawla, A. (2008). Macroeconomic aspects of demographic changes and intergenerational transfers in Thailand. Unpublished PhD dissertation, University of Hawaii at Manoa.

Department of Local Administration (2005). Guidelines for Standard Welfare of the Elderly. Bangkok: Department of Local Administration. (in Thai).

Eichhorst, W. (2011). The transition from work to retirement. Discussion Paper No. 5490, Forschungsinstitut zur Zunkunft der Arbeit (Institute for the Study of Labor), February.

Eurofound. (2012). Employment trends and policies for older workers in the recession. Publications Office of the European Union, Luxembourg.

Floden, M. (2001). Ageing populations and strategies for public debt in Europe. The scope and size of the public sector project. Stockholm: SNS (Center for Business and Policy Studies).

Fric, K. (2014). Interview with Serge Volkoff, Foundation Focus. Sustainable work: Toward Better and longer working lives” Issue 16 (December). Publications Office of the European Union, Luxembourg.

Gruber, J. & Wise, D. A. (2005). Social security programs and retirement around the world: fiscal implications, introduction and summary. NBER Working Paper 11290, Massachusettes: National Bureau of Economic Research, April.

Hellerstein, J. K., Neumark, D. & Troske, K. R. (1999). Wages, productivity and worker characteristics: evidence from plant-level production functions and wage equations. Journal of Labour Economics, 12(1), 409-446.

Hempornwisan W. & Akarachanon, P. (2014). Creating Financial Stability After Retirement for Thais. Research Division, The Securities and Exchange Commission. September. (in Thai).

Institute for Population and Social Research, Mahidol University. (2010). Research Project for Optimal Job Promotion for the Elderly in Rural Area. Presented to Office of Permanent Secretary, Ministry of Labor. November. (in Thai).

Kilenthong, W. & Rueanthip K. (2015). Comments on “Intertwining inequality and labor market under the New Normal” by Arayavechkit, T., Manprasert, S. and Pinthong, J. Presented at BOT Symposium 2015. (in Thai).

International Longevity Center. (2013). A Profile of Older Japanese 2013. Tokyo: International Longevity Center (Japan), March.

Jitapunkul, S. & Wivatvanit, S. (2009). National policies and programs for the ageing population in Thailand. Ageing International, 33(1), 62-74.

Knodel, J., Prachuabmoh, V. & Chayocan, N. (2013). The Changing Well-being of Thai Elderly: An update from the 2011 Survey of Older Persons in Thailand. College of Population Studies, Chulalongkorn University and HelpAge International.

Knodel, J., Teerawichitchainan, B., Prachuabmoh, V. & Pothisiri, W. (2015). The Situation of Thailand’s Older Population: An Update based on the 2014 Survey of Older Persons in Thailand, forthcoming.

Lahey, J. (2006). State age protection laws and the age discrimination in employment act. Working Paper No. w12048. National Bureau of Economic Research.

Mahlberg, B., Freund, I., Cuaresma, J. C. & Prskawetz, A. (2013). Ageing, productivity and wages in Austria. Labour Economics, 22(1), 5-15.

Meadows, P. (2003). Retirement ages in the UK: A review of the literature, Employment Relations Research Series No. 18, London: Department of Trade and Industry.

Myck, M. (2015). Live longer, working longer: the need for a comprehensive approach to labour market reform in response to demographic changes. European Journal of Ageing, 12(1), 3-5.

National Board of Promotion and Coordination for the Elderly (2002). The 2nd National Policy for Old Age (2002-2021). Bangkok: Office of the Prime Minister. (in Thai).

Organisation of Economic Co-operation and Development (2006). Live longer, work longer. OECD Report.

Phananiramai, M. (2003). Creating Income Security for the Elderly in Thailand through National Social Security and Quality of Life for Thais: Reflection of Economic Development and Society. Bangkok: Faculty of Economics, Thammasat University. (in Thai).

Phijaisanit, E. (2011a). Thai Social Security Pension Fund: An Analysis of Sustainability and Inter-generational. Applied Economics Journal, 18(2), 32-44. (in Thai).

Phijaisanit, E. (2011b). Tax Treaties in Asia Pacific Economic Integration & Cross-Country Fiscal Implications. Final Report. Office of the Higher Education Commission and Thai Research Fund. (in Thai).

Pholphirul, P. (2005). Competitiveness, income distribution and growth in Thailand: What does the long-run evidence show? International Relations Program, TDRI, May.

Phuangsaichai, S. (2008). Analysis of the Feasibility of Job Promotion and Income Generation for Seniors in the Pilot Area of Lampang Province: A Case Study of Hangchat District, Lampang. Research Center for Local Economic Development, Faculty of Economics, Chiang Mai University. (in Thai).

Prajuabmoh, V., Chayovan, N., Wongsith, M., Siriboon, S., Bangkaew, B. & Milintangul, C. (2009). Project Report on the Tracking and Evaluation System of the 2nd National Policy for Old Age (2002-2021). College of Population Studies, Chulalongkorn University. (in Thai).

Prasitsiriphon, O., Jeger, F., Tharachompoo, A. & Sakunphanit, T. (2013). Costing model for long-term care system in Thailand. Bangkok: Health System Research Office.

Raksasub, S., Kangwanpornsiri, K. & Intarawiset, N. (2010). The Project of Suitable Occupation and Earned Income Opportunities in Accordance with Older Workers. Final Report. Faculty of Economics, Institute for Research and Development, Ramkhamhaeng University. (in Thai).

Sakunpanit, T. (2012). Financial Stability of Thai National Health Security System. In Suntorntham, S. et al. (Eds), Thai National Health Security System. 251-262. Bangkok: National Health Security Office. (in Thai).

Schmitt, V. (2011). Overview of the Rapid Assessment Protocol (Costing tool). Assessment National Dialogue No. 2, Bangkok: International Labour Organisation.

Solow, R. M. (1956). A contribution to the theory of economic growth. Quarterly Journal of Economics, 70(1), 65-94.

Sonnet, A., Olsen, H. & Manfredi, T. (2014). Towards more inclusive ageing and employment policies: the lessons from France, The Netherlands, Norway and Switzerland. De Economist, December, 162, 315-339.

Soonthornchawakan N. & Cintakulchai S. (2009). Job Opportunities Creation for the Elderly. Thai Health Promotion Foundation. (in Thai).

Sombat, L., Yodpet, S. & Sakdaporn, T. (2011). Productive Ageing and Socio-Economic Development in Thailand. Final Report. Office of Permanent Secretary, Ministry of Social Development and Human Security. (in Thai).

Suwanrada, W. (2007). Current Situation of Welfare Allowance for the Elderly in Thailand. Final Report. Thailand Research Fund. (in Thai).

Suwanrada, W. (2015). Pension Reform and Fiscal Sustainability. Presented at BOT Symposium 2015. (in Thai).

Suwanrada,W. & Chandoevwit, W. (2010). Old-age Welfare and National Pension. Bangkok: Kewpie Co. Ltd. (in Thai).

Tankulrat, S. (2015a). Lonesome Elderly’s life saved by 5,000 Baht? Post Today. 1 August 2015. A4. (in Thai).

Tankulrat, S. (2015b). Hasten Reform of Thai Pension System: A Way Out for Ageing Society. Post Today. 24 September 2015. A2. (in Thai).

Thailand Development Research Institute (2008). The Development and Enhancement of Reach of and Access to Basic Social Security of the Elderly: Analysis of the Extension of Working Age and Saving Scheme for Retirement Final Report, Office of Permanent Secretary, Ministry of Labor. (in Thai).

United Nations Population Fund (2009). Impact of Demographic Change in Thailand: Situation and Policy Response. Bangkok. (in Thai).

United Nations, Department of Economic and Social Affairs, Population Division (2013). World population ageing 2013. ST/ESA/SER.A/348.

Wivatvanit, S., Kespichayawattana, J. & Choiejit, R. (2008). Poverty Situation of the Elderly and Management Model to Quality of Life of the Thai Elderly. Final Report. Thailand Research Fund. (in Thai).

Zwick, T. & Gobel, C. (2013). Are personnel measures effective in increasing productivity of old workers? Labour Economics, 22(1), 80-93.