The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the Asian Development Bank Institute

(ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included
in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

THAILAND:
Aging Society &
Economic Challenges

DR. KIRIDA BHAOPICHITR

Director
TDRI Economic Intelligence Service (EIS)

26 February 2019
The Situation

2
 Unlike most aging economies,
Thailand is middle-income

Thailand
37.7

Source: CIA Factbook, 2017

3
Thailand is aging quickly
Population over 60 years old

4
Average age has been rising

5
Number of working-age
population is falling
Population 15-59 years old

6
 In 15 years, almost half of Thais
will be above 50 years old
Thailand’s demographic structure

Men
2017 Women Men 2032 Women
Age Age

Million

• Largest share of Thais (~10m) are • Largest share of Thais (~10m) are
40-50 yrs old 55-65 yrs old
• 12 million are over 60; 4m over 70 • 20 million will be over 60 with
yrs old almost 10 million over 70 yrs old
• More are women • More are women 7
Most elderlies today have low
education levels

8
 Majority of elderlies make
less than Bt100,000 (US$3,125)/year

9
Elderlies rely on themselves and
their children for incomes

10
 Formal sector pension coverage
in Thailand is low
% of Workers & Retirees in Formal Sector Pension

Source: World Bank, Live Long and Prosper: Aging in East Asia and Pacific (2015)
11
 Urban women in Thailand leave
labor force earlier than other groups

Source: World Bank, Live Long and Prosper: Aging in East Asia and Pacific (2015)

12
 Poverty is high among households in
Thailand with older heads

Source: World Bank, Live Long and Prosper: Aging in East Asia and Pacific (2015) 13
Economic Implications

14
 Economic implications of
an Ageing Society

1. Less labor force less incomes, less

consumption, less taxes collected

2. Explosion of health care costs

3. Explosion of social welfare costs for

elderly

15
 Thailand’s share of labor force is
falling
Thailand’s population (Million) Thailand’s share of labor force (%)

16
 Public health care expenditures have
risen quickly over the past 20 years
Percent

Share of public health expenditure to total Gov expenditures

2002Nation-wide coverage of Universal healthcare

Share of public health expenditure to GDP

17
 Public health care expenditures will
triple in 15 years!

Billion Baht

Source: TDRI (presentation), 23 January 2018 2016 2032

18
One-fourth of elderly has
no saving
% of population over 60 yrs-old with savings 1/

Source: National Statistics Office, Elderly Survey 2014 19

 Elderly has debt of Bt351,000/ person;
Gen X &Y’s debt has been increasing rapidly

20
Preparing for Aged Thailand

21
 Policy options to lower dependency
& sustain economic growth
1. Raising retirement age & incentives for hiring elderly
2. Increasing female labor force participation
Labor Policies

3. Improve labor productivity through life-long learning &

economic restructuring

4. Encouraging inward migration & Automation

5. Promoting preventive healthcare
6. . Promoting financial literacy & new financial products
7. Strengthening the pension systems
8. Encouraging more child births
22
 Thailand’s labor productivity
needs to improve
Labor productivity
(US$ per person per annum)
100,000
Manufacturing Service
80,000

60,000

40,000

20,000

0
Singapore Malaysia Thailand Phillpines Indonesia

Source: IMD World Competitiveness Yearbook 2012 23

 As Thailand ages, service sector
could be a future engine of growth

Share of Real GDP (%), 2016 Share of Employment (%), 2016

Others Others
1% Agriculture
6% 1%

Agriculture
31%

Manufacturing Services
28% 45%
Services
62%

Construction
3% Manufacturing
Construction 17%
6%
24
 Thailand’s labor force will decline
by more than other ASEAN countries

Source: World Bank, Live Long and Prosper: Aging in East Asia and Pacific (2015) 25
 More Policy Options

 Aging implies a strong pension, effective health care

system for all, and financial products for elderly

 Aging society implies lower demand for many

government services -> public sector downsizing
Example: The right school size

 Aging society also requires more efficient

infrastructure planning.
Example: City planning, road/rail network
connectivity
26
THANK YOU

27