Myths and Facts about Inequalities in Thailand

This paper analyzes inequalities in Thailand over the past three decades and the implications of Covid-19 on existing inequalities. We show that while total income and consumption inequalities in Thailand have been declining, it raises concerns regarding some drivers behind the declining trends. First, the decline in income inequality among the older households is largely driven by private transfers. Given Thailand' s demographic transformation into aging society, this channel is not sustainable. Second, despite the increasing longevity trend, household heads aged 55-69 years old have become inactive in the labor markets over the years. Among active households, the earnings inequality among households who mainly earn from farming activities has risen. However, such increase was masked at the aggregate level because of the higher shares of households working in non-farm sectors and the decline in their earnings inequality. Third, while consumption inequality has fallen similarly to income inequality for all age groups, the low-income households remain highly exposed to income shock. These poor households have much higher shares of essential spending, which are harder to adjust. Finally, while the full effects of Covid-19 on inequality are still unfolding, our evidence shows that in the short-run the poor and the low educated are vulnerable to job and earnings losses.