Structural Transformation — How Does Thailand Compare?

March 4, 2015

Preview Citation

Format: Chicago

Vladimir Klyuev. Structural Transformation — How Does Thailand Compare?, (USA: International Monetary Fund, 2015) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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.

Subject: Agricultural sector, Economic sectors, Employment, Labor, Labor productivity, Production, Productivity

Keywords: Agricultural price support, Agricultural sector, Differentials in Thailand, Employment, Global, Higher-productivity sector, High-productivity sector, Industrialization, Labor productivity, Low-productivity activity, Low-productivity agriculture, Price support, Productivity, Productivity difference, Productivity differential, Productivity growth, Productivity increase, Standard of living, Structural transformation, Thailand's productivity gap, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/051
Stock No:

WPIEA2015051
ISBN:

9781498395335
ISSN:

1018-5941

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