Over the past two decades, Thailand has pursued an ambitious development policy, which has lifted millions out of poverty and improved the overall standard of living.
But how much do we really understand about the consequences of development on the well-being of Thai households?
A study by TDRI, led by Ammar Siamwalla and Nipon Paopongsakorn entitled “The Life of Thai People During the Two Decades of Development”, seeks to understand these development phenomena by focusing on the changing nature of the family structure and living standards. The study has several important implications.
First, the study argues the family structure has changed profoundly in the past two decades.
The research team categorises family structure into six main types: 1) single person family; 2) family with non-family members (friends and partners); 3) one generation family (husband and wife); 4) two-generation family (husband/wife and children); 5) three-generation family (husband/wife, children and grandparents) and finally 6) family with a generation gap with grandchildren and grandparents staying at home while the working parents live and work elsewhere.
Over the past 20 years, it is noted that Thai families have become smaller, with fewer children and more elderly family members.
One major change is that the number of households with a generation gap (where working parents are absent) has increased substantially to more than one million households, particularly in the Northeast and North.
This is a worrying trend since elderly and often poorly educated grandparents are left to take care of young children.
However, the number of three generation households in urban areas is also increasing, reflecting an interdependence among family members of different generations.
In addition, the number of single person families has also increased from 20% to 34%. Most of these single-person families are female senior citizens, who live alone.
Since 1986, Thai households have enjoyed a better standard of living. Young workers have more years of schooling while access to education has also substantially improved, particularly in rural areas.
Yet there remains a gap between the rich and poor in terms of education.
The data also shows that Thais are healthier as their life expectancy has increased to 70 years for a baby boy and 78 years for a girl.
Our households also enjoy better amenities, particularly TV, mobile phones and improved water supply.
Second, income and savings have risen, while the poverty level has decreased. Families’ income levels have increased at a slightly higher rate than GDP, and at a rate that exceeds expenditure per capita.
Families are saving more the number of families with no savings has dropped from 48% to 25%.
Consequently, the overall poverty level has dropped. Another factor which has contributed to the lower rate of poverty was the introduction of universal health care insurance in 1990.
Other social security schemes implemented over the past two decades have also helped to reduce poverty across the country.
The bad news is inequality between the rich and the rest is still very wide and the gap has reduced at a snail’s pace.
While the poor are earning more money as a result of better education and health, the gap between the middle income and rich households has increased.
This is partly because the rate of return from secondary and vocational education is lower than that for tertiary education.
Moreover,20% of the richest households earned more than 54% of household income in 2009.
According to the survey, the richest group saves on average 6,300 baht per month, while the poorest group saves nothing.
It was also found that around 30% of the wealthiest households have a net worth of more than 100,000 baht, while 94% of the poorest households have a net worth of less than 50,000 baht.
Families’ ability to save, invest and prosper is still fundamentally different between the haves and have-nots, and this warrants serious attention from the government.
Our workforce is changing: young workers are leaving the agricultural sector in large numbers to seek jobs in the industrial and services sectors.
The change should have caused a better distribution of income in society,but it hasn’t.
This is because wages in the new jobs and industries are relatively low.
So while the number of “wage earners”has increased, the total amount for wages paid out in society has not increased.
This has effectively stalled progress in making income more equally distributed and, in some cases, widened the inequality gap.
All in all, Thailand has successfully lifted herself out of poverty. Thais receive more comprehensive healthcare and education services, provided by the government. Nevertheless, two decades of development here also has a downside.
Many families are no longer living together. Working family members often live apart as they search for work and earn an income. At the same time, the problem of inequality continues to remain worrisome.
Globalisation and technological advances have brought enormous economic benefits to a developing country like Thailand; however, this wealth still has not been distributed equally.
Poverty is vanishing but wealth distribution has become an emerging development problem. Trickle-down effects clearly have not worked well here so there is a need to reconsider a new development model which will ensure inclusive and sustainable growth.
Dr Nipon Poapongsakorn is Distinguished Fellow at the Thailand Development Research Institute. Policy analyses from the TDRI appear in the Bangkok Post on alternate Wednesdays.
“The bad news is inequality between the rich and the rest is still very wide and the gap has reduced at a snail’s pace.”
First published in Bangkok Post, 31 July 2013