Wannaphong DurongkaverojFaculty of Economics, Chiang Mai University
Problems Even though Thailand has economic growth, there is the vast difference between the rich and poor. This disparity prevails as the national income, educational attainment, health care, opportunities are unevenly distributed.
Problems (cont.) The lack of opportunities to access the basic needs of life causes people are not able to develop their level of living and has to accept the low wage. When people have low income, it is impossible to afford the modern medicine relevant to their diseases, school tuition. The fruit of economic growth can not result from the impoverished people.
Problem (cont.) The poor in Thailand are 7.75 million people or 5.1% of all population living below the poverty line 1,678 Thai Baht per month. The Gini Coefficient now are 0.48 that it is higher than the acceptable level at 0.40
Leading Question Can we eliminate penury? Can we narrow the disparity between the rich and the poor, the impoverished people and the affluent people? Can we raise the citizen’s living standard? Can we develop our country? Or is it impossible?
Social, Political, and Economic View Adam Smith (1776) said the duty of government are national defense, administration of justice, the provision of certain public goods. Thomas Paine (1791) said the duties of government are to overcome the poverty, to provide the poor welfare, to provide education, to provide the elderly welfare, to pay cash to women who are mother, to fund wedding couple, to help make funeral arrangement, and to create the pool of jobs.
Social, Political, and Economic View(cont.) Joseph E. Stiglitz (2008) said that government can intervene the market when there is market failure including monopoly power, public goods, externalities, asymmetric information, unemployment so as to achieve the socially optimal equilibrium.
Leading Question If the poor can not afford the basic needs of life due to their insufficient income, can government provision through the welfare help improve the impoverished people’s level of living?
Purposes of study To analyze the structure of Thailand’s education system, free universal coverage health system, and welfare’s system. And tax system as well as the situation of penury and income inequalities in Thailand. To find the demand for social welfare and the statement of existing social welfare program. To find the ways for Thailand to become a welfare state. To propose the ways to develop Thai citizen’s living standard
Definition Welfare State is- A government that entirely provides for the welfare, or the well-being, of its citizens.- A welfare state provides education, housing, sustenance and healthcare for its citizens.- The state that plays a key role in the protection and promotion of the economic and social well-being of its citizens.- The state that emphasize on redistribution of rights and the benefits that government should provide to its own citizens.
Requirements of becoming a welfare state LAW TAX WELFARE REFORM PROGRAM
Idea on Welfare State Assoc. prof. Euamporn Phijaisanit, Ph.D. (2009) divided , by beneficiary, welfare state to four kinds Residual Welfare State Solidarity Welfare State Institutional Welfare State Industrial Achievement Welfare State
Idea on Welfare State (cont.)Moreover, by practically, there are two kindsof welfare state Universal Selectivity
Idea on Welfare State (cont.) Assoc. Prof. Kittipat Nonthapatamadul (2007) said that welfare state is an alternative for government to satisfy citizens while maintaining the free market and democracy without implementing the communist. Barr (2003) said that welfare state worked like Robin Hood that help eliminate poverty, more equitable in allocating of income, reduce the problem of divided society.
Review Literature (cont.) Lane Kenworthy (1998) did a research “Do social- welfare policies reduce poverty”. He found that there is significant reduction in absolute and relative poverty in European countries and the United States by comparing it between pre- and post-reforming country to become a welfare state.
Welfare in Each Country England : National Health Services, Personal Health Services, Social Security The U.S. : WIC, TANF, Child support, Food stamps, Vocational Rehabilitation, AFDC, EITC, Energy or Utility Assistance Germany : Initiative 50 plus, Help Toward Work (HTW)
Welfare in Each Country (cont.) France : CNAMTS, MSA, CRAM, CPAM, CNAF, CAF, Couverture Maladie Universelle Sweden : Child care, daddy months, Denmark : Insured unemployed, the public employment services, the preventive home visit
Welfare in Each Country (cont.) Norway : Folketrygdfonder, employment services, service housing, home help Finland : Home Help Services, Old Age Allowance, employment service, sickness insurance and disability insurance
Related Theory Maslow’s Hierarchical Theory of Motivation Bergson Social Welfare Function Rawlsian Social Welfare Function Pareto Optimality Criterion Consumer Behavior Theory Nicholas Kaldor and J.R. Hicks’s Compensation Criterion Consumer Behavior Theory
Related ResearchResearch in other countries Lane Kenworthy John D. Stephens Timothy J. Bartik Assar Lind beck Robert Moffit
Review Literature (cont.)Research in Thailand Robin Broadway, Katherine Cuff, and Frank Flatters Kuntapat Eiumpeung Tanakitti Bamrungchaokasem Worawan Chandoevwit Aphilarb Phaophinyo Tata Ei Thailand Development Research Institute The National Statistical Office of Thailand
Research Method Primary data - Questionnaire Secondary data - Tax Structure - Education System - Health System - Welfare System - Poverty and Income Inequalities Situation
Research Method (cont.) Population are people who work in Chiang Mai University : 11,437 people- Government Officer 1,352- University Routine Officer 4,446- University Casual Officer 4,697- Routine Worker 942
Research Method (cont.) Taro Yamane, confidence level at 95% n= n= n= 387 Thus, researcher collected 400 samples.
Research Method (cont.) Using stratified random sampling divides samples into 4 groups and using accidental sampling in each group as followed,
Research Method (cont.) Details of questionnaire General Information Statement of social welfare Statement of social problem and welfare demanded
Results Tax Structure- Revenue Department: Individual Income Tax, Corporate Income Tax, VAT, Specific Businesss Tax, Stamp Duty- Excise Department : Excise Tax- Customs Department : Custom Duty (Tariff)
Results (cont.) Education System Thailand uses the system of “6-3-3” means- Six years for elementary education- Three years for junior high school- Three years for senior high school
Results (cont.) Modes of learning : three kinds of education- Formal Education- Non-formal Education- Informal Education Compulsory Education : 9 years (Grade 9) Basic Education : 12 years (Grade 12)
Results (cont.) Health System Thailand has three health insurance Social Security Organization Government Officer Universal Coverage
Results (cont.) Exemption of Universal Coverage- Infertility- Intrauterine Insemination- Gender Reassignment Surgery- Mental Disorder- Drug Abuse- Organ Transplantation
Results (cont.) Welfare System By Ministry of Social Development and Human Security Benefits cover the ten group of people.- Children - Vagrant- Women - Trafficked people- The disabled - Violent people- The elderly - Homeless people- HIV infected people - Self-Help Settlement
Experiencing Social Problem Fre Cumula Living que Perce Valid tive Standard ncy nt Percent Percent Valid severe 286 71.5 71.5 71.5 moder 69 17.3 17.3 88.8 ate little 37 9.3 9.3 98.0 Very 8 2.0 2.0 100.0 little Total 400 100.0 100.0
Demand for welfare Cumulati Financial Freque Valid ve Assistance ncy Percent Percent Percent Valid Most 262 65.5 65.5 65.5 desire Moderat 51 12.8 12.8 78.3 e Little 44 11.0 11.0 89.3 Very 43 10.8 10.8 100.0 little Total 400 100.0 100.0
Test Relationship Satisfaction and the demand for more welfareHypothesisHo = There is no relationshipH1 = Satisfaction and the demand for more welfare are related
Asymp. Sig. (2- Value df sided)Pearson Chi- 120.09 4 .000Square 9(a)Likelihood 41.121 4 .000RatioLinear-by-Linear 32.916 1 .000AssociationN of ValidChi-Square Tests 400Casesa 5 cells (50.0%) have expected count less than 5. The
Test Relationship (cont.) Experiencing Social problem and the demand for financial aidsHo = There is no relationshipH1 = Experiencing social problem and the demand for financial aids are related
Asymp. Sig. Value df (2-sided)Pearson Chi- 135.842( 9 .000Square a)Likelihood Ratio 121.680 9 .000Linear-by-LinearAssociation 99.474 1 .000N of Valid Cases 400Chi-Square Testsa 6 cells (37.5%) have expected count less than 5. The minimum ex
Conclusions and Proposal Tax system The optimal tax criterion requires Efficiency, Equity and Administrative Ease. Thailand’s tax structure may be equitable with a deduction in the first bracket. However, this deduction causes the loss of government revenue.
TAX PROPOSALS1. Maintaining the progressive tax rate but broader tax base and lower tax rate (Martin Feldstein)2. Eliminating the tax exemption that seems to coddle the rich instead of the poor3. Proportional progressive tax structure
Conclusions and Proposals (cont.) Education System Education is an important source of development. Not only private benefit but also social benefits prevail as a result of an increased educational attainment.Government should- Increase the compulsory education to 12 years or grade 12.- Indoctrinate about morality in university
Conclusions and Proposals (cont.) Health System Health system in Thailand is good enough to serve all of the citizens because there are three kinds of health insurance provided for government officer, employee and the rest of people with universal coverage. Government should- reform the health system to reduce the overlap of each program, we should use only health insurance- Use the same system (three health insurance) but reduce the exemption to universally cover every diseases.
Conclusions and proposals (cont.) Welfare system It covers the ten kinds of beneficiary. There are many types of program to take care of impoverished people. However, in each field, it does not cover every province around Thailand. • Government should - Provide more program in each coverage - Pay attention to “missing ” poor, women, children, elderly, and disabled.
Conclusions and proposals (cont.) Penury and Income Inequalities- Better situation in poverty rate and Gini Coefficient- Fluctuation in the warm-family index- Increase in crime rateGovernment should- Pay attention not just economic growth but also economic development in terms of education, health, social unrest, freedom, political situation and also happiness.
Welfare Proposals Social Insurance Programs Public Assistance Programs Desired welfare from questionnaire - financial Aids - 1,500 Thai Baht for the elderly and the disabled as well as provide them nursing home - Help children’s parent since birth until age 15 - Help female-head family who has child - unemployment compensation - allow to leave from work about a year when worker bear a child but still receive salary
Proposals for further study Expand the population Cost-benefit analysis of reforming Thailand to become a welfare state Experimental economics about how welfare related to an improved living standard and reduce the absolute poverty Study about disadvantages of welfare state
The governmentadministration is similarto “Traveller Map”