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สถาบันวิจัยเศรษฐกิจป๋วย อึ๊งภากรณ์
Puey Ungphakorn
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Call for Papers: PIER Research Workshop 2025
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Discussion Paperdp
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Year
2025
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2022
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12 January 2021
20211610409600000
No. 147

Understanding a Less Developed Labor Market through the Lens of Social Security Data

Abstract

While understanding labor market dynamics is crucial for designing the country's social protection programs, prohibitive longitudinal surveys are rarely available in less developed countries. We illustrate that employment history from Social Security records can provide several important insights by using data from a middle-income country, Thailand. First, in contrary to the traditional view, we find that the formal and informal sectors are quite connected. Our analysis of millions of individual histories by a machine learning technique shows that more than half of registered workers left the formal sector either seasonally or permanently long before their retirement age. This finding raises a question of whether the social protection schemes being separately designed for formal and informal workers are effective. Second, the semi-formal workers also had a much flatter wage-age profile compared to those always staying in the formal sector. This observation calls for effective redistributive tools to prevent earnings inequality to translate into disparities in old-age and transmit to the next generation. Lastly, on the employer size, we find that almost half of formally registered firms had fewer than five employees, the benchmark often used to define informal firms. This result suggests that the distributions of firm sizes differ across countries and the employer size alone is unlikely sufficient to define informal workers.

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JEL: J01J08J21J60
Tags: employmentwork historysocial securityk-means clusteringthailand
The views expressed in this workshop do not necessarily reflect the views of the Puey Ungphakorn Institute for Economic Research or the Bank of Thailand.
Nada Wasi
Nada Wasi
Puey Ungphakorn Institute for Economic Research
Chinnawat Devahastin Na Ayudhya
Chinnawat Devahastin Na Ayudhya
Bank of Thailand
Pucktada Treeratpituk
Pucktada Treeratpituk
Bank of Thailand
Chommanart Nittayo
Chommanart Nittayo
Bank of Thailand

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