Population Ageing and Policy Responses in Thailand Professor

Population Ageing and Policy Responses in Thailand Professor Worawet Suwanrada, Ph. D. Dean, Faculty of Economics, Chulalongkorn University Public Symposium in Seoul, Korea Sharing Responses on the Ground – Aging Society and the Surrounding Challenges in Asia Diamond Hall 2 F, Koreana Hotel February 28, 2017 1

Outline of Presentation 1. Population Ageing in Thailand 2. Situation of Older Population in Thailand 3. Policy Responses 4. Future Challenges 2

Outline of Presentation 1. Population Ageing in Thailand 3

Population Aging in Thailand Increase of proportion of older population (aged 60+) through last 50 years. 16. 5% 13. 2 9. 5 10. 78 millions 7. 4 4. 6 4. 9 1960 1970 5. 5 1980 1990 2000 2010 Source: The National Population and Housing Census, National Statistical Office, quoted in TGRI (2012), The Situation of Thai Elderly 2011. 2015 4

Population Aging in Thailand The proportion of the older population aged 60 and over will increase from now 13% (9%) to 32% (25%) in next three decades. (unit: 1, 000) 70, 000 15. 9% 60, 000 8, 408 10, 350 12, 622 15, 126 17, 579 19, 360 32. 1% 20, 519 50, 000 40, 000 66. 0% 42, 739 42, 961 30, 000 42, 293 40, 740 38, 796 55. 1% 36, 992 35, 175 20, 000 18. 1% 10, 000 12, 642 0 11, 792 12. 8% 11, 082 10, 506 9, 801 8, 996 8, 169 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 0 -14 15 -59 60+ Source: National Economic and Social Development Board , Population Projection in Thailand: 2010 -2040 5

Population Aging in Thailand The number and proportion of the oldest old population (80 and above) will be increasing. (unit: 1, 000) 25, 000 Thai older persons live longer. 20, 000 19. 1% 3, 140 3, 922 2, 422 15, 000 37. 2% 1, 995 13. 7% 10, 000 1, 421 1, 070 2, 708 5, 897 1, 690 3, 677 3, 061 43. 7% 29. 6% 56. 7% 0 7, 639 4, 732 5, 000 4, 630 6, 885 5, 868 9, 260 8, 399 7, 255 9, 335 8, 958 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 60 -69 70 -79 80+ Source: National Economic and Social Development Board (NESDB), Population Projection in Thailand: 2010 -2040. 6

Population Aging in Thailand Continuous Decrease of Potential Support Ratio (Number of the Working Population per One Elderly) from 5 in 2010 to smaller than 2 in 2040 6. 0 5. 1 5. 0 4. 2 4. 0 3. 4 2. 7 3. 0 2. 2 2. 0 1. 9 1. 7 1. 0 0. 0 2015 2016 2020 2025 2030 2035 2040 Data Source: National Economic and Social Development Board , Population Projection in Thailand: 20107 2040, calculated by the author.

Population Ageing in Thailand: Fertility Decline (TFR) after 1970 s. Thai society has fewer children. 4. 9 5 4 3. 5 2. 7 3 2 2. 5 2 1. 7 1. 6 1. 5 1 0. 5 0 1974 -1976 1985 -1986 1995 -1996 2005 -2006 2011 2021 Source: TGRI (2012), The Situation of Thai Elderly 2011 and National Economic and Social Development Board, Population Projection in Thailand: 2010 -2040 8

Outline of Presentation 2. Situation of Older Population in 9

Decrease of Mean Number of Living Children by Age of Older Persons 5 4. 3 4. 5 3. 8 4 3. 3 3. 5 2. 9 3 2. 5 2 4. 6 2. 1 2. 4 2. 0 2. 2 4. 4 3. 9 3. 5 2. 9 2. 5 1 0. 5 0 50 -54 55 -59 60 -64 65 -69 2011 Survey 70 -74 75 -79 80 up 2014 Survey Source: Knodel, Prachuabmoh and Chayovan ((2013’s “The Changing Well-being of Thai Elderly: An update from the 2011 Survey of Older Persons in Thailand”, College of Population Studies, Chulalongkorn University and Help. Age International. For 2014 from John Knodel, Bussarawan Teerawichitchainan, Vipan Prachuabmoh and Wiraporn Pothisiri (2015), The Situation of Thailand’s Older Population: An Update based on the 2014 Survey of Older Persons in Thailand, Help. Age International, Thailand. 10

Living Arrangements of Older Persons (% older persons aged 60 years and older) 20 18 16 19. 0 17. 6 16. 3 15. 9 distribution of with whom the live alone spouse only with at least one children other arrangement total % living with or next door to a child % living with a married child or child in law 14 12 10 8 8. 4 8. 6 8. 8 6. 3 6 4 2 0 2002 2007 lives alone 2011 2015 lives with spouse only Source: Thailand Gerontology Research Institute’s Situation of Elderly in Thailand 2014. Location of nearest child adjacent same village or municipality same province outside province has no children Total % 8. 8 19. 0 54. 7 17. 5 100 65. 1 36. 9 lives alone 29. 4 lives with spouse only 25. 5 16. 3 15. 4 21. 5 17. 5 100. 0 18. 8 17. 6 30. 1 8. 0 100. 0 Source: John Knodel, Bussarawan Teerawichitchainan, Vipan Prachuabmoh and Wiraporn Pothisiri (2015), The Situation of 11 Thailand’s Older Population: An Update based on the 2014 Survey of Older Persons in Thailand, Help. Age International, Thailand.

Old-age Financial Security: Sources and Main Source of Income of Older Population in Thailand (%) Income Source work pension old age allowance interest, saving, rent spouse children relatives other Total 1994 38. 0 4. 1 0. 5 17. 1 21. 4 84. 5 11. 4 8. 8 - Percent receiving any income from the following source 2002 2007 2011 37. 7 37. 8 42. 7 4. 3 5. 4 7. 5 3. 0 24. 4 81. 4 18. 0 31. 7 35. 7 17. 4 23. 3 21. 4 77. 2 82. 7 78. 5 6. 9 11. 0 8. 9 2. 6 1. 5 2. 5 - 2014 38. 8 6. 3 84. 9 n. a. 25. 2 78. 9 10. 0 1. 6 - 1944 31. 5 4. 0 0. 0 1. 7 4. 6 54. 1 2. 4 1. 7 100. 0 Main source of current income 2007 2011 28. 9 35. 1 4. 4 6. 0 2. 8 11. 4 2. 9 2. 6 6. 1 3. 1 52. 3 40. 1 2. 3 1. 5 0. 2 100. 0 2014 33. 8 4. 8 14. 9 3. 8 4. 3 36. 8 1. 4 0. 2 100. 00 Source: For 1994, 2002, 2007 and 2011 from Table 4. 2 in Knodel, Prachuabmoh and Chayovan ((2013’s “The Changing Well-being of Thai Elderly: An update from the 2011 Survey of Older Persons in Thailand”, College of Population Studies, Chulalongkorn University and Help. Age International. For 2014 from John Knodel, Bussarawan Teerawichitchainan, Vipan Prachuabmoh and Wiraporn Pothisiri (2015), The Situation of Thailand’s Older Population: An Update based on the 2014 Survey of Older Persons in Thailand, Help. Age International, Thailand.

Future Generation’s Preparedness for Old-age Financial Security Should we prepare Year of ourselves for old-age life Survey or not? 2007 2011 The most important issue of Should Not sure preparedness not Finance 98. 8 91. 4 3. 7 4. 9 Health 96. 9 Housing 96. 5 87. 1 6. 8 Finance 98. 4 Health 97. 3 Housing 97. 1 Adequate Saving/Assets Accumulation for Old-age Life Ever thought Never thought Prepared Not Yet 57. 6 32. 3 10. 1 53. 8 33. 9 12. 3 Source: National Survey on Opinions and Attitudes of People on Older Persons in 2007 and 2011 by National Statistical Office 13

Ability of Daily Livings of Older Persons % with %withdifficulties ADL difficulties %with functional difficulties %with IADL difficulties 40. 9 35. 5 30. 3 28. 1 26. 5 17. 5 16. 1 % Source: John Knodel, Bussarawan Teerawichitchainan, Vipan Prachuabmoh and Wiraporn Pothisiri (2015), The Situation of Thailand’s Older Population: An Update based on the 2014 Survey of Older Persons in Thailand, Help. Age International, Thailand. w ov e ab cu lty lis te d ffi di ith An yf un ct io na l, A DL or IA Ta DL kin di ffi cu IA DL An y kin Co ltt y s ici ne gm ed gc ha ng e ow n un tin at bo or us gb Ta ffi di An y. A DL oo on cu lty g tin Ea se 9. 3 2. 9 m in g sh Gr n go 3 lt s oe h te Pu tti n sh ru /b ce fa ng hi W as 3. 1 et sin es Dr m fro 3. 2 g g th oi gt in t le n w in 3. 6 Us do ng 4. 1 in g 4. 4 up ct Ge tti ng un yf lty al io n 2 ng bi An im Cl lyi rs 3 or 00 -3 00 g 2 di ffi cu st et m ua Sq kin W al ai er g tti n m ra og kil in g 5 s 5. 2 Lif t 9. 5 7. 3 Ba 18 14

Main providers of assistance with daily living activities (% of persons 60 and older who have assistance for daily activities) grandchild 3% sibling 5% paid/professional carer 1% servant/employee 1% other 0% spouse 29% son/daughter in law 6% daughter 42% son 13% Source: John Knodel, Bussarawan Teerawichitchainan, Vipan Prachuabmoh and Wiraporn Pothisiri (2015), The Situation of Thailand’s Older Population: An Update based on the 2014 Survey of Older Persons in Thailand, Help. Age International, Thailand. 15

Outline of Presentation 3. Policy Responses 16

Policy Responses Start of the 2 nd National Plan on the Elderly (2002 -2021) Proposal for System Reform towards Aging Society by National Reform Assembly The Act on the Elderly B. E. 2546 (2003 A. D. ) The 1 st Evaluation (2002 -2006) of the 2 nd NP on the Elderly 2002 2003 2004 Establishment of Elderly Fund 2006 2009 The 3 rd Evaluation (2012 -2016) The 2 nd Evaluation (2007 -2011) 2010 2011 2014 National Saving Fund Act B. E. 2554 Start of Area-based Health Fund Scheme 2016 Cabinet Resolution on Ageing Society Universalization of Old-age Allowance Start of Area-based Health Fund Scheme 2015 - Establishment of National Pension Fund (Provident Fund) - Establishment of National Pension Committee - Subsidization to Private Firms for Older Persons’ Employment - Public Housing for Older Persons 17

The 2 nd National Plan on the Elderly (2002 -2021 ) Strategy (No. of Index) Accomplishment (%) Overall Strategy on readiness preparation of the people for their quality ageing 51. 0% 28. 6% Strategy on the elderly promotion and development Strategy on the social safeguards for the elderly Strategy on management of developing the national comprehensive system for undertakings and developing the personnel for the elderly involving missions Strategy on processing, upgrading and disseminating knowledge on the elderly and the national monitoring of implementation of NPE 53. 3% 33. 3% 85. 7% 100. 0%

Public Pension Schemes § Mixed system between occupational (or labor status)-based pension system (for formal sector’s working population, says employees) and Old Age Allowance System § Universal coverage by Old Age Allowance System for the elderly who are not pensioners under occupational-based pension system. § Mixed system § between non-contributory schemes and contributory schemes § Between DB and DC § Fragmented system, managed by many governmental organization § No governmental function to be responsible for entire picture of all public pension schemes.

Entire Picture of Current Public Pension Schemes in Thailand Informal Sector Working Population and Non Labor Force Population (2/3 of working pop) Formal Sector Working Population (1/3 of working pop) Government Pension Fund Government Pension Provident Fund Local Government Pension Fund Public Enterprises Pension Schemes Social Security Fund National Saving Fund Old-age Allowance System 20

Current Picture of Elderly Care Regime How to construct proper elderly care system to support medium-income older persons? Unprivileged Older Person/Household (Low-income) Central Government’s Care Facilities/Shelters Local Authorities’ Care Facilities/Shelters Non-profits Organizations’ Care Facilities/Shelters Medium-income Older Person/Household Community-based Integrated Older Persons’ Long Term Care System Family Care High-income Older Persons/Household Institutional Care by Private Care Providers Private Home Helpers 21

Community-based Integrated Older Persons’ Long Term Care System 22

Sub-district Health Fund: started in the beginning of 2006, strengthened 2009, expand to whole country in 2011 National Health Security Office • • • Tambon Administrative Organization, Municipality Tambon Health Fund • • • Community • • To promote community health To promote well-being of people and community based on the cooperation among citizens, local authorities and public health authorities To decentralize authority to local authorities under the civic participation and academic support from other organizations. Community Health Information, Strategy Map, Community Health Plan Community care for the elderly, the disability, the chronic patients Preventive care: diabetes, high blood pressure, TB, AIDS Health behavior adjustment Cooperation with other relating heath organizations for provision of community health care services

Retirement Age in Thailand • Government Officials: 60 (= pensionable age) o Except for some occupations extended to 65 -70 o o Professional: medical doctor, dentist, veterinarian, fine artist, traditional dancer, traditional musician, traditional singer judiciary, judge (until 70) professor (65) • Private Sector: No mandatory retirement age, normally 55 -60 o Pensionable age of social security fund’s old-age benefits = 55+

Proposal from National Reform Assembly February 2015 ECON HEALTH • pension reform • economic reform for vitality (especially, labor market) • promoting strengthening community-based long term care system, including in urban areas • realizing safe living environment at home and constructing age-friendly communities, promoting social ENVIRON housing and enabling ageing business and industries MENT SOCIAL • promoting preparedness of and empowering individual, family, community, public and private sectors • increasing older persons’ value

Strategic Plan for Promoting Older Population’s Works 4 Pillars in the Strategic Plan to Cope with Older Workers’ Employment proposed by the Ministry of Labor to the National Older Persons Commission (NOPC) Promotion of Older Persons’ Employment Distribution Jobs to Households and Communities Extension of Official Retirement Age of Government Officials Promotion of Continuing Employment for Private Sector’s Employees 26

Cabinet Resolution towards Ageing Society @ November 8, 2016 • Subsidization to Older Workers Employment • Employed Older Persons’ Salary and Wages (limits 15, 000 THB/month) as Corporate Tax Income Exemption (not more than 10% of total employees) • Senior Complex • Ministry of Social Development and Human Security • National Housing Authority, Government Housing Bank and Community Organizations Development Institute • Reverse Mortgage • Integration of Public Pension Schemes • National Pension Committee • Establishment of National Provident Fund 27

Outline of Presentation 4. Future Challenges 28

Future Challenges: How to align all related plans together? Increasing Thai population’s competency to promote growth (DRAFT) POPULATION PLAN IN adequately 20 YEARS LONG-TERM DEVELOPMENT (2015 -2034) Strengthening Economic Security and Social Protection for Thai population Promoting wellbeing of Thai family The 2 nd National Plan on the Elderly (2002 -2021) Strategy on readiness preparation of the people for their quality ageing Strategy the elderly promotion and development Strategy on the social safeguards for the elderly Strategy on management of developing the national comprehensive system for undertakings and developing the personnel for the elderly involving missions Strategy on processing, upgrading and disseminating knowledge on the elderly and the national monitoring of implementation of NPE 29

Future Challenges • Limitations of Family and Family Support Policy • Roles of Local Authorities in Older Person Affairs • Roles of Private Sector in the Context of Aging Society • Employee Welfare • Promotion of Aging Marketplace (Industry) to enhance Economic Vitality • Financing Aging Society, especially Pension and Long Term Care Issues 30

Thank you for your attention. Contact: worawet@gmail. com 31