สถาบันวิจัยเศรษฐกิจป๋วย อึ๊งภากรณ์

ผลงานวิจัยฉบับเต็มโดยนักวิจัยของสถาบันและนักวิชาการภายนอก

LABOR INCOME INEQUALITY IN THAILAND: THE ROLES OF EDUCATION, OCCUPATION AND EMPLOYMENT HISTORY

2562

No. 117
2 ธันวาคม 2562

Labor Income Inequality in Thailand: the Roles of Education, Occupation and Employment History

abstract

Thailand’s income inequality has reportedly declined since the mid-1990s. This paper examines possible mechanisms underlying the dynamic patterns of the country’s labor income inequality. Using the Thai labor force survey between 1988 and 2017, we document that the country’s reduction in income inequality is likely driven by the fact the earnings at the bottom part of the distribution have become more similar. The median wage gap between college and non-college workers, however, still gets larger over time. Our key explanation is the changes in education-occupation composition. Recently college graduates are no longer concentrated in high skill jobs. A larger share of secondary educated workers works in low-skill jobs instead of the middle-skill ones. Using panel administrative data from the Thai Social Security Office, we find that wage disparity can also be explained by employment history. The high wage earners earn more since they enter the market, and the gap gets wider as the workers age. Additionally, the top of the group can command higher wages by working at a large firm or switching to a new job. These findings highlight the fact that to tackle the income inequality issue, the country needs to understand the underlying mechanisms behinds its dynamics.

No. 116
13 พฤศจิกายน 2562

The European Smoking Bans and Mature Smokers: Can They Kick the Habit?

abstract

Using individual level data, this paper investigates whether nationwide smoke-free legislations in Europe lead to smoking reduction and cessation among mature smokers. It exploits cross-country data and the European Union’s multinational governance that provides a quasi-experimental setting. Top-down regulations on smoke-free environment by the EU mitigate the self-selection bias and endogeneity bias of smoke-free laws generally faced in other settings. The results show that comprehensive bans lower smoking propensity by approximately 7 percent and reduced smoking intensity by 10 percent. The effect persisted and increased over time. Light smokers and heavy smokers were 14.5 and 7.2 percent more likely to quit while there is no significant effect on average smokers. Those working in industry and occupation that faced with more comprehensive and strict bans were also more likely to quit, showing that comprehensive bans can increase smoking cessation even among mature smokers with well-established addiction.

No. 115
9 กันยายน 2562

Insurance and Propagation in Village Networks

Cynthia Kinnan, Krislert Samphantharak, Robert Townsend and Diego Vera-Cossio

abstract

We study the dual role of networks in providing insurance and in propagating idiosyncratic shocks by using variation in the timing of severe shocks on health spending experienced by households in Thai villages. We find no impacts on food consumption. Smoothing is largely achieved through local gift and loan networks. However, insurance is partial for some households so they adjust their production decisions-drawing on their working capital, cutting input spending, and reducing labor hiring, hence propagating the shocks to other households. We find that upstream businesses close to the underinsured households in the supply chain network experience reduced local sales and increased inventories. Likewise, workers closer to the underinsured households in the labor network experience declined probability of working locally and reduced earnings. We find evidence of ex-post adjustments of these upstream households through shifting resources towards activities with lower exposure to local shocks. Our results suggest that social (village-level) gains of expanding health insurance might be higher than private (household-level) gains.

No. 114
27 สิงหาคม 2562

Mapping Thailand’s Financial Landscape: A Perspective through Balance Sheet Linkages and Contagion

abstract

This paper conducts in-depth profiling of players and interlinkages in the Thai financial system based on sectoral balance sheet data and disaggregated supervisory data on banks and mutual funds. Several aspects of Thailand’s financial landscape have been documented. We find that financial interconnectedness has risen and become more complex, with the financial landscape increasingly tilted toward non-bank intermediaries. Network topology suggests a segmented landscape, with the presence of a core cluster where key players including households, firms, large domestic banks, and mutual funds of large banks’ asset management arms are located, indicating their tight interconnections. Leveraging on entity-level balance sheet profiles, we develop a stress-testing framework that is based on a network model of financial contagion. Two types of shocks are studied. For industry shocks, we find that losses generally propagate via the liability and ownership channel and the reverse liquidity channel. But when the losses are large enough, the fire-sale effects dominate. For bank reputational shocks, we simulate a loss of confidence in major banks via deposit withdrawal and fund redemption. While the overall losses are much smaller than those of industry shocks, these risks cannot be ignored since the mutual fund industry stands to suffer and panic selling could amplify the losses.

No. 113
20 สิงหาคม 2562

Should All Blockchain-Based Digital Assets Be Classified Under the Same Asset Class?

Voraprapa Nakavachara, Tanapong Potipiti and Thanawan Lertmongkolnam

abstract

The literature is well aware that blockchain-based digital assets would constitute a new asset class. However, it has been rather silent about the distinction among them. This paper discusses the digital tokens’ differences and similarities by their (i) creation and initial distribution; (ii) intended properties; (iii) actual usage; and (iv) behaviors. Although the digital tokens are indistinguishable in some aspects, they differ in the way they are created and initially distributed. Some of them have distinguishable risk and return profiles. Therefore, we take a view that the digital tokens take (or will take) different roles in the financial systems; should be classified under different asset classes; and should be subject to different sets of regulations (although some may overlap).

No. 112
19 สิงหาคม 2562

Understanding Corporate Thailand I: Finance

abstract

This study analyzes the entire universe of registered firms in Thailand. There are five main findings. First, firm size distribution is smooth, with a majority of firms in the middle of the distribution; the apparent ”missing middle” phenomenon is entirely driven by arbitrary categorization of small and medium enterprises (SMEs). Second, the Thai corporate sector is very concentrated; the concentration has also risen over the past decade. Third, larger firms seem to have advantages over smaller firms regarding financing. Fourth, smaller firms tend to disproportionately invest less in fixed assets than larger firms. Finally, firms in the middle of the size distribution exhibit the highest return on asset (ROA) but have low leverage, consistent with the symptom of credit constraints. Large firms, in contrast, seem to have lower ROA but higher debt. Meanwhile, smaller firms seem to have both lower leverage and ROA. Overall, our results suggest that the Thai corporate sector exhibits both inefficient capital allocation and financial vulnerability. The paper has important policy implications on resource allocation in the economy, particularly, regarding appropriate assistance provided to small and medium enterprises.

No. 111
5 สิงหาคม 2562

Tax-Motivated Profit Shifting and Anti-Avoidance Stringency: Firm-Level Evidence from Developing Countries

abstract

This paper uses firm-level data from developing countries to examine the significance of tax-motivated profit shifting from high-tax to low-tax countries by multinational enterprises and to analyze the extent to which anti-avoidance measures mitigate the profit shifting. Focusing on firms in ASEAN5, this study shows that (1) tax-motivated profit shifting is statistically and economically significant, especially for manufacturing firms, (2) auditing and transfer-pricing scrutiny is more effective in reducing profit shifting than documentation requirement alone, and (3) tax-motivated profit shifting is prominent for large firms, while anti-tax avoidance measures result in the absence of profit shifting detected from small manufacturing firms. The findings have important policy implications regarding tax revenues in developing countries, especially those depending on multinational enterprises but having weak governance.

No. 110
9 กรกฎาคม 2562

“Gold Miss” or “Earthy Mom”? Evidence from Thailand

abstract

This paper investigates the impact of Thai women’s education on their marriage behavior and fertility. It first uses the panel data set from the Socio-Economic Survey to estimate the effect of education on the marriage market. The result from applying the individual fixed effect estimation indicates that obtaining a university degree decreases the probability of women’s marriage, emphasizing the rise of the “Gold Miss” phenomenon in Thailand. The cross-sectional data set from the Labor Force Survey examines the effect of education on fertility. By applying both the instrumental variable using the compulsory education reform as an instrument and pseudo-panel approaches to take into account the endogeneity of schooling, the result shows that education causally reduces fertility, which provides a convincing sequential explanation for the dramatic decline in fertility in Thailand.

No. 109
29 พฤษภาคม 2562

The Impact of Regional Isolationism: Disentangling Real and Financial Factors

abstract

Recently, there is a pressure for isolation policies both within the United States and among the EU members. The pressure arises due not only to the difference between regions in the U.S. and/or countries in the EU, but also to the difference across their population which affect the gains and losses from economic integration, both real as from trade in a common market and financial as in a monetary financial union. To get a better understanding of this pressure, one would need a model of trade and capital flows that takes into account the difference between individuals in a region and differences across regions. There is also a need for detail data at the individual and aggregated level, which often are not available. In this paper, we use unique long-panel data of households in Thailand, and from these data, we construct the household financial accounts, the village economic accounts, and the village balance of payments account. We also provide stylized facts on factor prices, factor intensities, financial obstacles, and village openness document differences across regions. Finally at the national level it is clear there is co-mingled variation in trade via devaluations and in finance via policies toward off shore bank and within-country financial infrastructure.

We develop a heterogeneous-agent/occupational-choices/trade model with financial frictions carefully built up and calibrated around micro and regional facts, that is, at both the individual level and the aggregate level. Then, we conduct two counterfactual policy experiments. In the first counterfactual experiment, we distinguish the effects of trade from the effects of capital flows. More specifically, we determine what would happen if we allow the prices of goods to change as in baseline scenario while keep borrowing limits and interest rates constant, and vice versa. In the second counterfactual experiment, we determine the effect of isolation policies that impede trade and/or capital flows across regions. We find through these counterfactual experiments that both real and financial factors are at play, that there are differences across regions in impact even when (policy) movements in variables such as interest rates and relative prices, which are exogenous to the regions, are common; impacts can be large, and vary with policy; and impacts are significant heterogeneous with both gains and losses and non-monotone movement across wealth classes and occupations, even allowing for occupation shifts which apriori might have mitigated impact.

No. 108
10 พฤษภาคม 2562

Alternative Boomerang Kids, Intergenerational Co-residence, and Maternal Labor Supply

abstract

This study investigates the boomerang phenomenon among adult children in Thailand. We estimate the effect of having children on co-residence between parents and adult children using Socio-Economic Survey panel data. We find that adult children who have moved out tend to move back in with their parents after having children to save time and money on childcare. The presence of young children increases the likelihood of intergenerational co-residence by over 30%. This study is the first to provide empirical evidence of boomerang kids in an Asian context, which is distinctive compared with Western countries. The relationship between intergenerational co-residence and the maternal labor supply is also examined using the instrumental variable approach based on the cross-sectional Labor Force Survey, which has data covering over 30 years. Our results show that co-residence increases the female labor supply by 21% and also extends women’s working hours by 10 hours.