Development Centre

Immigrant workers do contribute significantly to Thailand’s economy, says new ILO-OECD Development Centre report

 

 

BANGKOK 29 November 2017 - In recent decades, Thailand has been an attractive destination for migrant workers due to its relatively high wages and its fast economic growth.  A joint report by the OECD Development Centre and the International Labour Organisation (ILO), How Immigrants contribute to Thailand’s economy, demonstrates the contribution of migrant workers and makes recommendations regarding the enhancement of this contribution.

 

Thailand has a long history of immigration and became a net immigration country in the early 1990s. Over the period from 2000 to 2010, the foreign-born population increased by a factor of ten from 263 000 to 2.5 million people. The analysis looks at two dimensions of immigrant workers’ contribution: labour markets and economic growth, showing that the foreign-born labour force has raised the paid employment rate of the native-born population as well as their income per capita.

 

According to the findings of the report, foreign-born and native-born workers integrate very differently in the labour market. Immigrant workers are relatively young and active in many fast-growing occupations, which seems to confirm that immigration mostly responds to demand for labour. They are also younger than their native-born peers, and more likely to be employed, filling some of the labour gaps arising from the ageing of the Thai workforce.

 

The analysis also assesses whether the presence of foreign-born workers has benefited or harmed the employment opportunities of native-born Thai workers. It reveals that foreign-born workers have no impact on national native-born employment levels. However, the presence of immigrants does affect the composition of employment, and in particular seems to increase -positively- the number of native-born workers in paid employment.

 

How Immigrants contribute to Thailand’s economy highlights that immigrant workers are active in all sectors of the economy, and particularly in the industrial sectors. In 2010, one in every eight workers in manufacturing was an immigrant, and foreign born workers were also overrepresented in construction as well as in some service sectors such as private household services.

 

Given the sectoral distribution of workers and their productivity, the economic contribution of immigrant workers is estimated to range from 4.3% to 6.6% of gross domestic product in 2010, while they represented 4.7% of the employed population. In view of the relatively high employment rates of foreign-born workers, and their positive impact on native-born paid employment, it also seems likely that foreign-born workers have a positive effect on income per capita.

 

At the same time, while immigrant workers’ rights have progressed, specifically in the areas of social security, education and healthcare, they remain vulnerable and considerable gaps persist in terms of access to social benefits.

 

According to the report, the positive contribution of immigrants to the Thai economy could be further enhanced by improving existing policies based on the following recommendations:

 

  • Channels for regular immigration could be made more accessible and integration mechanisms further developed. Accounting better for immigration in the different sectoral policies, in particular labour market, education, investment and tax policies, could enhance immigrants’ contribution to Thailand’s development.
  • The gaps between the skills of immigrant workers and those needed by employers should be better monitored. Such gaps can be reduced by promoting the diversification of jobs occupied by foreign-born labour, notably through technical and vocational training.
  • Raise awareness of immigrants’ rights through information campaigns, and monitor labour standards in practice to reduce gaps between native-born and foreign-born workers.
  • Ensure regular and comprehensive data collection and analysis to help better inform policy makers of the impact of immigration on the Thai economy. For example, there is a need to include data on nationality and place of birth in national surveys.

 

 

Press contacts:

For more information or to obtain a copy of the report or request an interview, journalists are invited to contact:

  • Jittima Srisuknam  Jittima@ilo.org;  ILO Programme officer for Thailand
  • Bochra Kriout (bochra.kriout@oecd.org; Tel: +33 (0)1 45 24 82 96) at the OECD Development Centre’s Press Office

 

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How immigrants contribute to Thailand’s economy is part of the joint International Labour Organisation - OECD Development Centre’s comparative project on Assessing the Economic Contribution of Labour Migration in Developing Countries as Countries of Destination that is co-financed by the European Union. The nine other countries covered by the project include: Argentina, Costa Rica, Côte d’Ivoire, the Dominican Republic, Ghana, Nepal, Kyrgystan, Rwanda and South Africa.