EMPLOYMENT BEHAVIOUR OF THE ELDERLY IN THAILAND Thuttai Keeratipongpaiboon Department of Economics School of Oriental and African Studies (SOAS), University of London This research is a part of PhD thesis belonging to SOAS, University of London. The presenter thanks Professor Anne Booth for her valuable suggestions which have contributed to this research. The 11th IFA Global Conference on Ageing 28 May – 1 June 2012. Prague, the Czech Republic International Federation on Ageing (IFA) A part of the CSEAS Project

Structure 1 Introduction 2 Old-Age Employment Situation in Thailand 3 4 1 Introduction 2 Old-Age Employment Situation in Thailand 3 Determinant of Employment Decisions of the Elderly 4 Conclusion The presentation is divided into four parts. It begins with an introduction, explaining why this research is important. Next I give the picture of old-age employment situation in Thailand. The third section is about the results of econometric findings, revealing determinants of employment decisions of Thai elderly people. The last section concludes.

Introduction Significance of the Research Methodology 1 2 3 4 Significance of the Research Increasing longevity: longer period of retirement Thai elderly people cannot rely on their own savings and invisible pensions: need family supports Urbanisation has deteriorated strength of family relationship: what happen to Thai elderly people? Possibility: a number of Thai elderly people have to be economically active for their own survival. Research aim: to study dynamic of employment behaviour of the elderly in Thailand Methodology Data Socio-Economic Survey (SES) Data, 1990-2007 (National Statistical Office) Survey of the Older Persons in Thailand (SOP), 2007 (National Statistical Office) Secondary data from reliable sources Methodology Descriptive Analysis Econometric Analysis – using a Probit regression model As in most countries in the world, people in Thailand are living longer. The life-expectancy has been increasing gradually. Given that the official retirement age is unchanged, people will have longer period of retirement. However, Thai elderly people cannot rely on themselves as do the elderly in developed countries, they do not have sufficient own savings and pension benefits. Family is a key factor for old-age income in Thailand. Unfortunately, the gap in family networks seems to be wider in Thailand, as a result of urbanisation. More people are now living apart from their children in smaller households. People are now more individualistic and have to rely more on themselves. There are two choices for survival: (1) people have to increase their savings when they are in the working ages, and (2) they have to stay longer in the workforce. This research aims to study the latter, observing the dynamics of employment behaviour of the elderly in Thailand The research uses two sets of survey data. The first one is Socio-Economic Survey (SES), which were conducted by the National Statistical Office during 1990-2007. And the other is the Survey of the Older Persons in Thailand (SOP), which were also conducted by the National Statistical Office in 2007. Methodologies employed in this study are descriptive analysis and econometric methods, including a probit regression model.

Situation of Population Ageing in Thailand Old-age Dependency Ratio is on an upward trend: Thailand has the highest rate in the SEA region 1 2 3 4 This slide shows the old-age dependency ratios in South-East Asia during 1950-2010. Presently, Thailand (graphed by the red line) has the highest old-age dependency ratio in the Region (over 12 percent); a bit above Singapore’s. As can be seen from the steep line, Thailand has experienced rapid demographic changes in these two decades. The old-age dependency ratio will be increasing in the future as more people will age. The problem of population ageing in Thailand should therefore be a serious concern. Remark: an old-age dependency ratio is defined as a ratio of population 65+ per 100 population 15-64. Source: United Nations, Department of Economic and Social Affairs, Population Division (2011). World Population Prospects: The 2010 Revision, CD-ROM Edition.

Summary of the Elderly in Thailand Share of the Elderly by Living Arrangements, Thailand, 1990-2007 In 2007, the majority are: Attaining primary education or less (91.78%) Female (56.27%) Household heads (59.87%) Married (60.68%) Able to go out without assistance (healthy, 87.08%) Not working (58.09%) Not living in a household with pension incomes (94.60%) Living in the Northeast (35.39%) Living with their children (60.39%) Living in three-generational households (36.92%) Average age of Thai elderly increased from 69.15 (1990) to 69.72 years. 1 2 3 4 Share of the Elderly by employment situation, Thailand, 1990-2007 This slide summarises the situation of the elderly in Thailand during 1990-2007. The majority of Thai elderly people are poorly-educated, female, a household head, married and living in the Northeast. Most elderly people in Thailand are now staying with their adult children. It can be seen that more than 36 percent lived in three-generational households in 2007; also, almost one-fourth were found in two-generational households. However, more elderly people live alone or just with their spouse in these days. Also, more elderly people are living in “skipped generation” households, which consist of only grandparents and grandchildren. According to the survey, more than forty percent of total elderly people in Thailand are still economically active. Remark: *excluding skipped generation households Source: author’s own calculation from the 1990-2007 SES data

Old-Age Employment Situation Labour Force Participation Rates, the World Regions, 2005 1 2 3 4 Region/Country1 Age Group 25-54 55-64 65+ Men Women World 95.1 66.7 73.5 38.7 30.2 11.3 Developed Countries 91.9 75.3 63.9 44.9 13.4 6.3 Economies in Transition 90.7 81.3 52.6 31.2 14.2 7.8 Africa 96.2 61.0 86.5 48.3 57.4 25.8 Asia 96.3 64.2 77.6 35.4 38.0 13.2 Latin America and the Caribbean 94.3 64.3 76.1 37.2 13.7 Oceania 87.4 73.3 76.0 60.6 51.4 33.4 Thailand 95.9 82.2 81.8 65.7 41.0 21.7 Source: United Nations (2007, p.61, Table IV.2), Development in an Ageing World; Author’s own calculation from the ILO’s data, http://laborsta.ilo.org/ accessed on 12 march 2012. The labour-force participation rates of Thai elderly persons are quite high; higher than the world average. Almost one-fifth of Thai females aged 65 and over were found in the workforce in 2005. The LFP rates of females are quite high comparatively to Asia, LAC, Economies in Transition and the World. The share of elderly in Thailand’s labour force is on an upward trend; increasing from 3.7% to 7.0% during 1986-2006. Compared to other countries, the upper panel shows that labour-force participation rates of people aged sixty-five or over in Thailand are quite high. The rates of both men and women are higher than the world’s averages. In the meantime, the lower panel shows the share of elderly people (60+) in Thailand’s labour force, which is on an upward trend. The share increased from 3.7 to 7.0 percent during 1986-2006. Source: summarised from the Ministry of Labour (2007), The Situation of Old-Age Employment in Thailand.

Old-Age Employment Situation Situations of Old-Age Labour Force, Thailand, 1986-2006 1 2 3 4 Trends: more females, more older elderly (65+), better educated. The majority are self-employed (60.97% in 2006). More elderly people are recently found in the private sector. Source: summarised from the Ministry of Labour (2007), The Situation of Old-Age Employment in Thailand. This slide shows trends in the old-age labour force in Thailand. The ageing labour force have more females, older elderly people and better-educated people. It is also found more elderly workers in the private sector.

Old-Age Employment Situation Old-Age Employment Situations Thailand by Living Arrangements, 2007 1 2 3 4 This slide reveals the employment situation of Thai elderly people by living arrangements. The survey reveals that less than thirty percent of the elderly living in three-or-more-generational households were found in the workforce, compared with the figures of above forty percent in one- and skip-generational households. It might be said that the elderly who live apart from adult children are more likely to be economically active. Source: author’s own calculation from the 2007 SOP data

Old-Age Employment Situation The Situation of Old-Age Employment in Thailand, by Living Arrangements and Age Group, 2007 1 2 3 4 This slide shows the situation of old-age employment by living arrangements and age groups in 2007. As expected, the older the people, the lower the labour-force participation rate. However, there is an interesting finding. Focusing on people aged 80 and over, only 7.6 percent of people in these ages are found in the labour force. About 5.1 percent of the elderly living in three-or-more-generational households worked at some time in 2007, but more than 13 percent of the elderly living alone or just with their older counterparts worked. This is possibly because of low family support in small families, forcing people to participate in the workforce for their and their family’s survivals, rather than living in retirement. Source: author’s own calculation from the 2007 SOP data

Old-Age Employment Situation Reasons for Remaining in the Labour Force of the Elderly, by living arrangements, 2007 1 2 3 4 This slide shows the reasons for remaining in the workforce of the elderly, according to the survey. The main reason for the elderly to continue working is to take care of themselves and also of their families. Another important reason for them to continue working after the age of sixty is their health. Sixty years of age is too early to retire. Source: author’s own calculation from the 2007 SOP data

Old-Age Employment Situation Reasons for Leaving the Labour Force of the Elderly, by living arrangements, 2007 1 2 3 4 This slide shows the reasons for leaving the workforce of Thai elderly people. For those who have already left the labour market, they claim that old age is the most important reason for retirement. Some elderly people have retired because their family members ask them to stop working, and now they do housework or look after grandchildren. Source: author’s own calculation from the 2007 SOP data

Determinant of Old-Age Employment Variables Year 1990 1994 1998 2004 2007 I. Demographic Factors Age -0.027*** -0.028*** -0.029*** (-11.14) (-14.41) (-18.38) (-17.17) (-22.15) Secondary Education -0.207*** -0.018 -0.012 -0.014 -0.037 (-3.31) (-0.30) (-0.19) (-0.35) (-1.21) Bachelor’s Degree 0.011 -0.107 0.050 -0.038 -0.117*** (0.10) (-1.16) (0.43) (-0.73) (-2.64) Master’s Degree or Higher 0.187 -0.024 -0.204** (1.40) (-0.16) (-2.45) Male 0.118*** 0.056* 0.113*** 0.075*** 0.165*** (2.67) (1.72) (4.19) (3.32) (8.83) Household Head 0.177*** 0.262*** 0.188*** 0.273*** 0.228*** (3.37) (6.90) (7.11) (12.40) (12.23) Married 0.191*** 0.220*** 0.173*** 0.156*** (4.81) (6.87) (7.13) (7.73) (8.42) Able to go out by Themselves without Assistance 0.269*** (10.98) Access to Medical Welfare 0.004 (-0.40) (0.11) II. Economic Factors Pensions (Yes) -0.086 -0.145** -0.066 -0.145*** -0.114*** (-1.23) (-1.99) (-1.27) (-3.05) (-3.09) Transfer Payments (Yes) 0.024 -0.026 0.012 (0.61) (-0.88) (0.58) (-1.31) Poverty (Yes) 0.055 0.093** 0.036 0.080*** (1.27) (2.50) (1.01) (0.90) Savings (Yes) 0.007 -0.017 0.014 -0.003 (0.22) (-0.67) (0.60) (-0.21) Variables Year 1990 1994 1998 2004 2007 III. Household Characteristics Central 0.049 0.050 0.073 0.048 0.126*** (0.61) (0.84) (1.19) (1.40) (3.78) North 0.032 -0.022 0.040 0.122*** (0.39) (-0.38) (0.81) (1.14) (3.53) Northeast -0.013 0.055 -0.020 0.058 0.112*** (-0.16) (0.90) (-0.36) (1.62) (3.25) South 0.170* 0.081 0.125** 0.127*** 0.187*** (1.84) (1.25) (1.97) (3.21) (4.91) Rural -0.073* 0.000 0.013 -0.060*** -0.035** (-1.65) (0.02) (-3.72) (-2.46) Live in Three-or-More- Generational Household -0.040 -0.017 -0.125*** -0.056* (-0.69) (-0.41) (-3.07) (-1.84) Live in Two-Generational Household -0.085 -0.208*** -0.154*** -0.230*** -0.198*** (-5.72) (-5.51) (-9.10) (-9.35) Live in Skipped Generation Household 0.288*** 0.280*** 0.309*** 0.254*** 0.295*** (4.39) (5.92) (7.46) (7.63) (10.00) Household Size -0.210*** -0.205*** -0.186*** -0.213*** -0.256*** (-10.76) (-9.73) (-13.61) (-15.37) (-22.38) Household In the Agricultural Sector 0.086** 0.114*** 0.102*** 0.430*** 0.386*** (2.25) (3.57) (4.15) (20.47) (20.59) Number of Recipients in Household -0.119*** -0.133*** -0.129*** 0.001 (-4.96) (-7.05) (-7.50) (0.12) Number of Earners in Household 0.431*** 0.493*** 0.465*** 0.438*** 0.494*** (15.17) (19.82) (23.57) (27.01) (34.02) Number of Observations 2,279 5,861 6,913 15,478 20,120 Wald Chi-Squared 474.66 894.06 1085.73 1883.94 2785.62 Probability > Chi-Squared 0.0000*** Pseudo R-Squared 0.4974 0.5670 0.5660 0.6041 0.6240 Log Pseudo-Likelihood -796.59 -1724.72 -1986.62 -4175.35 -5144.71 1 2 3 4 This slide shows the econometric findings employing a probit regression model to analyse the socio-economic survey data during 1990-2007. Source: author’s own calculation from the 1990-2007 SES data

Determinant of Old-Age Employment 1 2 3 4 Significant Factors: Demographic Factors: age(-), male(+), household head(+), married(+), healthy(+) Economic Factors: pensions(-), poverty(+) Household Characteristics: rural(-), agricultural(+), household size(-), one-generational households(+) Key Findings: The elderly living in one-generational households are more likely to be economically active than those staying in other living arrangements. Implying: the presence of adult children is one of the key factors in the older persons’ decision to continue or to quit working. The findings reveal that older elderly persons are less likely to work. Those persons who are entitled to pension benefits are less likely to work as well. Elderly persons who are male, household heads, married, healthy or poor are more likely to work than those who are female, not given a role of household head, not married, unhealthy or wealthy. Negative correlation between household size and choice of employment confirms that the elderly living in larger households are less likely to work. Regarding the results of probit regression model, I found that the elderly living in one-generational households are more likely to be economically active than those living in other living arrangements. Possibly, the elderly living in such living arrangements would have less support from their family compared with other family types. This implies that the presence of adult children is a key factor for the elderly to continue or to leave the workforce.

Conclusions Conclusions Policy Implications 1 2 3 4 Conclusions The labour-force participation rates of the elderly have been increasing over these two decades. The majority of employed older persons are male, aged between 60-69, low-educated, married and self-employed. Elderly persons living in one-generational households are more likely to be economically active than those staying in other living arrangements. The main reason for remaining in the workforce is financial i.e. poverty and low family support. Another reason is that they are too healthy to retire. The key factor of labour-force withdrawal is health problems; they are too old to work. Policy Implications CONCLUSION The labour-force participation rates of Thai elderly people have been increasing over these two decades. The majority of employed older persons are male, aged between 60-69, badly-educated, married and self-employed. Elderly persons living in small households are more likely to be economically active than those staying in larger or multi-generation households. The main reason for remaining in the workforce is financial i.e. poverty and low family support. Another reason is that they are too healthy to retire. On the other hand, the key factor of labour-force withdrawal is health problems. POLICY IMPLICATIONS Although working could contribute to the country’s economic development, elderly employment should be also considered in its social aspects. Ideally, older persons should continue working as long as they wish and as long as their ability and competency allow them to do. They should have freedom of choices to work or to retire. Although working could contribute to the country’s economic development, elderly employment should be also considered in its social aspects. Ideally, older persons should continue working as long as they wish and as long as their ability and competency allow them to do.

Thank You Thuttai Keeratipongpaiboon Department of Economics SOAS, University of London Email: 231827@soas.ac.uk

Supporting Documents

Living Arrangements of the Elderly Share of the Elderly, by Living Arrangements and Regions of Residence, 1990 & 2007 1990 2007 The majority of elderly people in Bangkok live in two-generational households. The majority of older persons in the Northeast and Central regions live in three-generational households. It is a trend that more people are now living in one-generational households. This is happening in all regions. Skipped generational households are mostly found in the Northeast and North regions. The share is on an upward trend. The average size of household is decreasing in every region. This is because of a delay of marriage and changing value towards having children. The majority of elderly people in Bangkok live in two-generational households. Meanwhile, the majority of older persons in the Northeast and Central regions live in three-generational households. Trend: more elderly people are found in one-generational households in every region. Skipped generational households are mostly found in the Northeast and North regions; an upward trend. The average size of household is decreasing in every region. This is because of a delay of marriage and changing value towards having children. Source: author’s own calculation from the 1990 and 2007 SES data

Factors affecting Family Relationship Key factors to decrease the importance of family: Industrialisation, Urbanisation and Migration - Family Productive Enterprise - Wage Employment of Individuals - Parental Power + Industrialisation - Cost of Home- produced Goods Joint/Stem Family + Female Labour Force Participations - - + Demand for Female Labour + - + + + Ability to Purchase Privacy/Care Care of the Elderly + Universal Primary and Secondary Schooling + Per Capita Income + + - Fertility - + + Child Survival + - Availability of Caregivers + + Filial Piety + Housing Availability Urbanisation - + + Separation of the Generations Migration Remarks: - Straight and single-headed arrows show casual relationships that run from the cause to the effect; meanwhile, curved and double-headed arrows represent correlated factors, - A sign shown next to the arrow demonstrates a relation between factors. The net impact of factors can be calculated by multiplying the signs. For example, if there is a negative sign between factor A and B, and also a negative sign between factor B and C, the relationship of factors A and C is positive. Source: Mason (1992), Figure 1

Regional Population Ageing in Thailand Shares of the Elderly and Old-Age Dependency Rations, Thailand, 2000-2025 Region Share of the Elderly (%) Old-Age Dependency Ratio (%) 2000 2010 2020 2025 Whole Kingdom 9.43 11.90 17.51 21.22 14.30 17.61 26.58 33.28 Bangkok 7.88 11.28 20.40 26.97 10.61 16.06 30.68 42.50 Central (excl.BKK) 9.84 11.63 16.98 20.80 14.54 16.87 25.18 31.83 North 11.09 13.43 20.16 24.21 17.02 19.65 31.02 39.08 North-East 8.71 11.93 16.95 20.12 13.62 17.99 25.92 31.67 South 9.41 10.76 14.61 17.45 15.06 16.42 22.45 27.28 Source: Author’s own calculation from the Thailand’s Population Projection 2000-2030 provided by NESDB

Age Profiles of Household Savings Age Profiles of Savings (Whole Kingdom), by ages of household heads, 2007 saving patterns are following the life-cycle hypothesis of savings - bell-shaped graph similar patterns between living arrangements fluctuation has found after the age of seventy. Uncertainty is high in the later period of life. Source: Author’s own calculation from the 2007 SES data provided by NSO

Old-Age Poverty Share of the Poor Elderly (60+), by Region, Thailand, 1990-2007 Poor if household per capita income is below the poverty line The majority of poor elderly people are in the Northeast region. Rich households have positive savings; meanwhile, poor households are likely to face the problem of insufficient income. Regions Total Elderly People (%) Share of Poor Elderly People to Total Elderly People (%) 1990 1994 1998 2004 2007 Whole Kingdom 100.00 25.61 20.96 18.14 13.55 12.82 Bangkok 7.14 2.34 1.79 1.55 Central (excl.BKK) 21.93 10.97 13.25 7.95 5.26 North 26.85 19.77 15.97 14.18 North-East 30.61 32.18 27.10 17.65 20.40 South 31.29 18.63 15.36 10.36 9.55 Source: Author’s own calculation from the 1990-2007 SES data Share of Poor Elderly People, by Region, Thailand, 1990-2007 Age Profiles of Household Savings, by Income Groups, Thailand, 2007 Source: Author’s own calculation from the 1990-2007 SES data Source: Author’s own calculation from the 2007 SES data

Fertility in Thailand Remarks: 1 Bangkok was included in the Central region during 1960-1969; 2 1970 Census with Own Children Estimate, National Statistic Office; 3 1980 Census with Own Children Estimate, National Statistic Office; 4 1990 Census with Own Children Estimate, National Statistic Office; 5 2000 Census with Indirect Method Estimate, National Statistic Office; 6 The United Nations (2009a), World Population Prospects: The 2008 Revision; 7 Survey of Population Change, National Statistical Office. Source: adapted from Table 1 in Prachuabmoh and Mithranon (2003). 22

Alternative Old-Age Dependency Ratios 23

Alternative Old-Age Dependency Ratios Standard and Alternative Old-age Dependency Ratios, the World, 1980-2020 Estimates Projections 24 Source: Author’s calculation, using the data of the International Labour Organization, http://laborsta.ilo.org/, accessed on 1 March 2010.

Alternative Old-Age Dependency Ratios Standard and Alternative Old-age Dependency Ratios, Thailand, 1980-2020 Estimates Projections 25 Source: Author’s calculation, using the data of the International Labour Organization, http://laborsta.ilo.org/, accessed on 1 March 2010.

Natural Increases and Net Migration Estimates (1950-2010) and Projections (2010-2050), Thailand Remark: Natural Increase = Births – Deaths Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010 Revision, http://esa.un.org/unpd/wpp/index.htm accessed 8 March 2012. 26