Fostering Active Ageing in Thailand's Informal Economy: A Policy Imperative

Euamporn Phijaisanit

No 82, Discussion Papers from Thammasat University, Faculty of Economics

Abstract: Ageing societies pose a unique challenge for Thailand, where a large informal sector excludes most workers from mandatory retirement ages and social security coverage. While extending retirement ages is a pertinent consideration for the formal sector, policy considerations should also encompass the informal sector. Specifically, policies should strive to enhance the physical and cognitive abilities of older workers in the informal sector through appropriate guidance, empowering them to prolong their working years and bolster their financial security. Despite the availability of voluntary social security schemes, enrollment rates among informal workers remain low due to a combination of factors, including lack of awareness, perceived benefit inadequacy, financial burden, and reliance on alternative social welfare programs. Even those receiving the government's old-age allowance may struggle financially. This article highlights the underutilized potential of Thailand's extensive informal sector as a source of employment opportunities for older adults. Despite cross-country data suggesting a positive association between a large informal sector and high elderly employment rates, Thailand's labor force participation rate (LFPR) for individuals aged 65 and above remains comparatively low among similar developing nations. Furthermore, the LFPR decline for people transitioning from age group 55-64 to 65 and above is sharper in Thailand than in many other countries. The Active Ageing Index (AAI) can serve as a tool to investigate the factors contributing to Thailand's relatively low old-age LFPR by evaluating active ageing scores across various aspects. By identifying the missing elements in specific localities, the AAI and its sub-indices can guide local-area policy prioritization to address these gaps and enhance national policy effectiveness in promoting higher LFPR in old age. Fostering an active-ageing ecosystem within the informal sector will empower older individuals to continue working for longer periods and mitigate poverty risks in their later years.

Keywords: Active Ageing; Informal Economy; Ageing Society; Labor Force Participation; Thailand (search for similar items in EconPapers)
JEL-codes: E26 H53 I38 J14 J26 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2024-02, Revised 2024-02
New Economics Papers: this item is included in nep-age, nep-iue and nep-sea
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Published in Econ TU Discussion Paper No.82, February 2024, pages 1-16

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