Aging and the Labor Market in Thailand

Thailand’s labor market faces several challenges. Labor force participation has been declining, the shift of jobs out of the low-productivity agriculture sector has slowed, and informality is the norm. The COVID-19 outbreak has likely reinforced these trends. Thailand’s workforce has not transitioned to the types of jobs involving non-routine tasks and interpersonal communication that increasingly characterize knowledge-driven economies. The labor force participation of women is 20 percentage points lower than that of men, a gap that has persisted for two decades. Needs associated with caring for a growing population of older people could put additional pressure on working women. The higher labor force participation rate of older people in rural areas reflects a need to work longer to make ends meet despite the nearly universal Old Age Allowance social pension. The negative effects of population aging are not inevitable but addressing them requires changes across labor markets and by people of all ages. Population aging is not just about older people. The causes of and responses to population aging are tied to the actions of and policies affecting people of all ages. Expansions of Thailand’s labor supply could counteract the shrinking labor force implied by population aging. Increases in healthy life expectancy mean that older people are likely to be able to work longer. The large gap between male and female labor force participation means that there is significant potential to activate the labor supply of women. Migrants have been filling gaps in Thailand’s labor force in recent decades and could be better used to do so in the future.