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Double Dualism, Economic Growth Slowdown, and Falling Income Inequality in Thailand

Author

Listed:
  • TANADEJ VECHSURUCK

    (Department of Economics, University of Rhode Island, Kingston, United States)

  • PRAOPAN PRATOOMCHAT

    (Kem C. Gardner Public Policy Institute, University of Utah, Salt Lake City, United States)

Abstract

Thailand has experienced a decline in income inequality coupled with unimpressive economic growth since the end of the 1997/98 Asian financial crisis. This paper uses the structuralist approach to understand how these concurrent economic phenomena have become deeply intertwined. We argue that this intertwining results from Thailand’s economic structure, manifesting two types of dualism: (i) the dualism of the formal–informal sectors and (ii) the dualism of the dynamic–stagnant sectors. A decline in the informal sector in recent years coincides with a decrease in income inequality. Further, the second type of dualism between the dynamic and stagnant sectors has emerged since 2000. The stagnant sectors’ employment share has grown faster than that of the dynamic sectors, resulting in a slowdown in economic growth and less inequality. The decline of the informal sector and the rise of the stagnant sectors are the primary engines weighing down economic growth and reducing income inequality in Thailand.

Suggested Citation

  • Tanadej Vechsuruck & Praopan Pratoomchat, 2024. "Double Dualism, Economic Growth Slowdown, and Falling Income Inequality in Thailand," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 41(02), pages 137-169, September.
    • Handle: RePEc:wsi:adrxxx:v:41:y:2024:i:02:n:s0116110524500069
    DOI: 10.1142/S0116110524500069
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    Keywords

    dual economy; dualism; income inequality; informal economy; Thailand;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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