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Structural Transformation — How Does Thailand Compare?
Author:
Mr. Vladimir Klyuev
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Series:
IMF Working Papers
Volume/Issue:
Volume 2015: Issue 051
Language:
English
Publication Date:
04 Mar 2015
DOI:
https://doi.org/10.5089/9781498395335.001
ISBN:
9781498395335
ISSN:
1018-5941
Pages:
30
Keywords:
WP; productivity difference; low-productivity agriculture; high-productivity sector; price support; productivity differential; productivity growth; structural transformation; industrialization; agricultural price support; standard of living; Thailand's productivity gap; low-productivity activity; productivity increase; higher-productivity sector; differentials in Thailand; Agricultural sector; Productivity; Employment; Labor productivity; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2015: Issue 051