Structural Transformation — How Does Thailand Compare?
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Summary:
Thailand stands out in international comparison as a country with a high dispersion of productivity across sectors. It has especially low labor productivity in agriculture—a sector that employs a much larger share of the population than is typical for a country at Thailand’s level of income. This suggests large potential productivity gains from labor reallocation across sectors, but that process—which made a significant contribution to Thailand’s growth in the past—appears to have stalled lately. This paper establishes these facts and applies a simple model to discuss possible explanations. The reasons include a gap between the skills possessed by rural workers and those required in the modern sectors; the government’s price support programs for several agricultural commodities, particularly rice; and the uniform minimum wage. At the same time, agriculture plays a useful social and economic role as the employer of last resort. The paper makes a number of policy recommendations aimed at facilitating structural transformation in the Thai economy.
Series:
Working Paper No. 2015/051
Subject:
Agricultural sector Economic sectors Employment Labor Labor productivity Production Productivity
English
Publication Date:
March 4, 2015
ISBN/ISSN:
9781498395335/1018-5941
Stock No:
WPIEA2015051
Pages:
30
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