Transcript Population Growth and Economic Development

Social Policy toward
Population Change
Chompoonuh K. Permpoonwiwat, Ph.D.
School of Economics and Public Policy
Srinakharinwirot University
Bangkok, THAILAND
Topics
• Population Change : A Case of Thailand
• Ageing Population: Celebration/Challenge?
• Social Policy/Programs?
Population Change
Population Change in Thailand
Key Factors affecting population composition
and population structure
– Fertility (birth)
– Mortality (death)
– Migration
Population Change in Thailand
1. Thailand Population and the Rate of
Increasing (Growth)
– 1st half of 20th Century (1901-1940s): Thailand
population has a slow rate population growth
(1+%)
– In the 1950s and 1960s: Rapid growth in
population (about 3%)
* HH survey  from 1947-1959, 3.2%
(17.4 Million- 26.4 Million)
Population Change in Thailand
• Concerned Policy
– Obstacles for country development
• scarcity of resources
• Income/earnings couldn’t catch up with development
– Research for controlling numbers of population
Population Change in Thailand
• Main Reasons for population growth in the
50s and 60s
1. Reduction in death rate due to a
success in public health policy and
medical advancement
2. Stimulating Policy for Pronatality
toward East Asia leading country, e.g.
choosing to invest in the form of
children
Population Change in Thailand
Policy Toward decreasing in birth rate and
Fertility
• 1969 began the Birth Control Campaign
• 1977 had successful in evident of slower number birth
rate
• Now: very low increasing rate of population
Population Change in Thailand
2. Demographic Transition
2.1
Population Change in Thailand
2.2 Early Expanding Period
 1947-1977
- Dramatically decline in death rate
- High rate of birth expectancy
- Resulting to the present population (35-65 years
old)
- The group going to be in their retirement soon
(some are)
- The next group/ generation has a decreasing in
numbers continuously
Population Change in Thailand
2.3 No Returning to the High Stationary
 Complete Transition!
 Affect labor market, welfare, and other
infrastructures
Population Change in Thailand
3. Age Structure
 demographic transition is dynamic
1947  the beginning of transition
1980  the middle of transition where birth rate
has decline significantly
2000  the end of the high stationary period
What’s next???
Population Change in Thailand
• Summary
– Youth group has declined both in number and
growth rate
– The peak age group around 25-65 has increased
both in number and growth rate
– Thai people tend to live longer (decreasing of
death rate)
– We are now facing “Ageing Population,” or “Aging
Society!”
Population Change in Thailand
Population Pyramid
Population Change in Thailand
3. Urbanization and Urban Growth
– Weak Explanation in terms of urbanization index
– In Thailand, urban means “within municipality”
– Reports show increasing number of people
moving in to municipalities every year
Productivity
Back Effect to
Country’s Economy
Population
Change
Public Policy
toward Aging
Society
Business/Industry
Regional
Economy
Community
Household
Consumption
& Savings
Investment
International
Trade
Government
Spending
Ageing Population: Celebration
/Challenge?
Population Ageing: A Celebration and
a Challenge
• Ageing is a triumph of development. People are
living longer because of better nutrition,
sanitation, medical advances, health care,
education and economic well-being.
• Although population ageing poses social and
economic challenges to individuals, families and
societies, with the right policies in place, societies
can prepare for an ageing world, address the
challenges and take advantage of the
opportunities.
Ageing Population Around The world
UNFPA (2012)
Aging: dependency ratio goes up
Population in ASEAN
Ageing society
Source: UN Population Division (2012)
Did you know ???
UNFPA (2012)
Did you know ???
UNFPA (2012)
SOCIAL POLICY/PROGRAMS???
Income Supporting Program
 Developed Nation has some forms of universal
income support for their elderly population
 The differences in the structure of income
support programs among countries for example:
- Canada 3 programs : Universal Demo
grant at age 65, Earning related pension at age
60, and mean-tested transfer at age 60
- Italy = 35 years of Labor market
Experience ( Started work 20 , Retries 55 get full
Benefit)
Health Insurance
 Health care is a universal entitlement. ( The
elderly do not receive particularly special care)
 Only Japan , Separate system of health care
for elderly
 Developed countries use a variety of
mechanisms to attempt to control medical
cost
Non-Health In Kind Transfer Program
 Residential Care
 Home-help services
 Rehabilitation service.
 Housing Benefit
 Food
 Subsidized public transport
Government & Social Security
"If men were angels,
no government would be necessary.”
James Madison
Federalist Paper No. 51
1788
Government & Social Security
Social Security Policy
Transitional Analysis of Social Security-related Expenditure and National Burden Ratio in Major Advanced Countries
In advanced countries,
- Especially in Japan, social security expenditure is increasing due to aging.
- As a consequence, burden is generally rising in these economies, though it has declined in Japan.
※National Burden Ratio = Total Taxes as a percentage of National Income (NI) + Social Security Contribution as a percentage of NI
Government Social Security-related Expenditures to GDP
(Unit: %)
France
Germany
United Kingdom
National Burden to GDP
(Source) Social Security-related Expenditures: IMF “Government Finance Statistics Yearbook 2002”, OECD “Economic Outlook 76” , “Stat Extracts” and “National Accounts 2011 vol.II”
National Burden Ratio: OECD “National Account 2011 vol.II” and “ Revenue Statistics”, CAO “National Accounts” etc.
(Note ) Figures represent the general government-based data (including the central/local governments and the social security funds).
37
37
Basic Concept of Social Security in Japan
In Japan, social security is realized through burden sharing by “self-help”, “mutual help” and “public
help”. Actually, “self-help” is a foundation of burden sharing, complemented by “mutual help” to share
risks of life mutually, and then, “public help” is positioned to provide the necessary security for life
against situations which are not to be covered by “self-help” and “mutual help”.
自助
Self-help
The concept that people sustain their lives
by working on their own and keep their
good health on their own.
Health insurance (1961 – )
共助
Mutual
help
The systems based on social insurance:
insurance payment would be provided in
case of disease, old-age, need in long-term
care , or unemployment. Subscribers
would make premium payment, while
public expenses which secured by tax
revenues would cover a part of resources
of insurance payment.
Pension insurance (1961 – )
Long-term care insurance (2000 – )
Employment insurance (1974 – )
Worker’s accident compensation
insurance (1974 – )
公助
Public help
The systems such as public assistance to
ensure the healthy and cultured living of
necessitous persons, as well as social
welfare to provide a certain amount of
goods and human services to the socially
vulnerable.
Public assistance (1950 – )
Measures for the disabled, etc.
38
38
Aging Population
Current Fiscal Situation (Contd.)
● Ratio of People Older than 65 years to the Total Population
● Japanese Life Expectancy
（％）
1970
40
1970
Japan
35
7.1
Germany
30
France
25
U.K.
U.S.
2000
17.4
2030
31.6
→200
0
200
0
Japan
10.3
14.
2
13.
7
16.3
28.0
2.6
11.
7
12.
9
16.1
23.1
3.2
7.0
13.
0
15.8
21.1
2.8
5.3
9.8
12.4
19.9
2.6
7.5
Germany
France
10
5
0
2000
2011
Life
Expectancy
(male)
66.0
70.7
79.4
Life
Expectancy
(female)
70.8
76.0
85.9
Life
Expectancy
at age 65
(male)
11.9
13.2
18.7
Life
Expectancy
at age 65
(female)
14.1
16.1
23.7
U.S.
15
1970
1973
U.K.
20
1950
1961
→20
30
2030
2050
(CY)
(Source) Japan 1950-2010: “National Census” (Ministry of Internal Affairs and Communications)
2011-2050: “Japanese Future Demographic Projections” (National Institute of Population and
Social Security Research) (January, 2012)
Other countries: “World Population Prospects: the 2010 Revision” (United Nations)
Life
Expectancy
(Source)
“Abridged Life Tables 2010” (Ministry of Health, Labour and
6.7
7.4
11.4
39
at ageWelfare)
75 (July, 2011)
39
Japanese Population Pyramid in 1950
Source: National Institute of Social Security and Population Problems
ชาย
หญิง
Population Pyramid in 1970 – 1990 - 2010
Source: National Institute of Social Security and Population Problems
Projection: 2030-2050
Source: National Institute of Social Security and Population Problems
Population aging will progress furthermore in the future, and then, our country will
face the severe society where one elderly person is supported by only one young
person.
＜1965＞
＜2012＞
＜2050＞
Making an
environment to
enable the elderly
to work longer
period.
＾
＾
＾
＾
＾
＾ ＾ ＾ ＾ ＾ ＾ ＾ ＾ ＾
＾
＾
＾
＾
9.1 people supported
1 person aged 65 or
over
-;
-;
-;
2.4 people support
1 person aged 65 or over
>
<
1.2 people will support 1
person aged 65 or over
(estimates)
＾
＾
＾
＾
Efforts are needed to increase in
people on the support side as
much as possible through the
^ ^ social security reform.
0
^ ^
0
Assistance to child and child-raising
Population (thousand) /
Component ratio
Age 65 and
over
Age 20-64
Age 19 and
under
(Source) Ministry of Internal Affairs “National Census”, “Population Estimates”
National Institute of Population and Social Security Research “Population Projection for Japan (middle fertility and mortality
43
43
Comparison of General Account Budget between FY1990 and FY2013
・ Most of expenditure increase is due to the growth of social security-related expenditure.
・ Increase of government bond issuance is due to the growth of social security-related expenditure as well as
falling tax revenues.
(Unit: trillion yen)
(Note) Data is based on Initial budget
44
44
Pension System in Japan
Minimum: $670/month
Long Term Care Insurance System
Mandatory for people at the age of 40
Minimum payment is around $ 41
(Depend on residents and individual
economic status)
Social Security Benefits Expenditure
Fiscal
Year
Social Security Benefits (billions of JPY)
Total
Medical
care
Pension
Welfare
and others
Per capita
social
security
benefits
National
income
(billions
of JPY)
Ratio of social security benefits to national
income (%)
Total
Medical
care
Pension
Welfare
and others
(1,000 JPY)
1975
11,769
5,713
3,883
2,173
105
123,991
9.49
4.61
3.13
1.75
1980
24,774
10,733
10,453
3,588
212
203,879
12.15
5.26
5.13
1.76
1985
35,680
14,283
16,892
4,504
295
260,560
13.69
5.48
6.48
1.73
1990
47,220
18,380
24,042
4,799
382
346,893
13.61
5.30
6.93
1.38
1995
64,724
24,052
33,499
7,174
515
368,937
17.54
6.52
9.08
1.94
2000
78,119
25,995
41,201
10,923
616
371,804
21.01
6.99
11.08
2.94
2005
87,783
28,109
46,293
13,380
687
365,878
23.99
7.68
12.65
3.66
2006
89,110
28,103
47,325
13,682
697
373,591
23.85
7.52
12.67
3.66
2007
91,430
28,946
48,274
14,211
716
374,768
24.40
7.72
12.88
3.79
Source: Japan Statistical Yearbook 2009
Ageing society in Thailand
Challenge!
:This issue leads to big concern for Thai
government about “the financial
stability” of public finance to “provide
social security services”.
The extrapolation of changes in Thai population
divided by ages.
Potential support ratio for old age in Thailand in 1960 – 2035.
Reforming the social security in
Thailand to cope with aging society
Social security system
In Thailand, the social security
system can be regarded as the mixed
model
 social service
 social insurance
Thailand Social Security System
• (1) social service is provided to improve
human capital for eligible person by free of
charge, e.g. national health insurance and free
compulsory education
• (2) social insurance is provided to guarantee
income security by requiring a certain amount
of financial contribution from eligible person,
e.g. social security fund and government
pension fund.
Growth of expenditure, Revenue and GDP
1997-2006
2007-2011
4.9
8.8
7
12.5
Other expenses
4.5
6.6
Net revenue
4.7
4.2
Nominal GDP
6.3
6.5
Total Expenditure
Social welfare
Source: Bank of Thailand (2012)
Public finance situation
Government revenue
• 90% come from taxes, mainly VAT, CIT, PIT.
• Relies more on indirect taxes, especially VAT (7% of sales);
CIT is greater than PIT.
• High tax rates compared to other Asian countries but
effective rates are low.
• One-fourth of labor force actually file PIT.
Labor force = 38
mil.
CIT
Tax base
PIT
Pay PIT
=9 mil.
Potential PIT payers
= 27 mil.
Unemployed = 0.7 mil.
Public finance situation
Government expenditure
• More than 70% of total expenditure is current
expenditure, i.e. salaries, transfer payments.
• Education is the largest share about 25%;
health care & social security is significantly
increasing in recent years.
Fiscal sustainability
• Public debt to GDP reduced from 55.82% in
2002 to 41.71% in 2011.
• Unbalanced revenue and expenditure,
i.e. average growth of revenue was about 2
times lower than expenditure growth.
Public debt to GDP
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
General
services
Defense
Internal
security
Education
Heath
care
Social
security
Economic
services
Percentage of Ageing Popultion/Total
Population
Countries
2005
2010
2020
2030
Japan
19.9
22.6
28.5
30.8
Thailand
7.8
8.7
12.4
17.4
*** The critical issue is that Thailand is expected to reach a
certain level of aging at the much lower levels of per capita
GDP compared to Japan, South Korea and Singapore (UNFPA,
2010)
Challenges : Thailand Aging Society
Pension system
 The current pension system in Thailand can be
categorized into three pillars (ILO, 2012b)
 The formal workers can be included in multipillar income security for old-age
 The informal workers can only access the
universal 500 baht scheme which is an old-age
allowance.
The Structure of pension system
Pillar 1
Coverage
Pillar 2
Pillar 3
Government
Social
Universal
Government
Provident
Retirement
Pension
Security
500 baht
Pension
Funds
Mutual
Scheme
Fund
scheme
Fund
Automatic
Automatic
voluntary
Voluntary
private
informal
government
based on
individual
sector
sector
sector
collective
Government Compulsory
employees
Funds
agreements
Contribution
None
6%
(General tax)
Coverage
1.5 million
None
3-12%
2-15%
deductible
(General tax)
10 million
23 million
Private, tax
1.16 million
Source: adapted from ILO (2012b)
2 million
n.a.
The pension system : Challenges
 The challenge of existing system is improvement of coverage,
adequacy of benefits and management. In particular, on the
coverage side, Thai pension system for income security after
retirement can cover only the employed in formal sector but
a large number of the informal workers have not been
covered. ILO (2012b)
 The consumption of Thai elderly relies on labor income*,
asset-based income** and transfer income from their
child(ren)*** but income from public transfer is negligible.
Hence, graying of population is likely to cause the Thai elderly
more vulnerable, particularly those who do not have
secured sources of income. Paitoonpong et al. (2010)
• *37.8, **31.7%, *** 82.7%
Who’s taking care of the elderly?
0.76 million from 7.02 millions elderly population have (main) caregivers.
40.5 % are daughter, 28.0 % are spouse.
To employ caregivers (as servant/employees) is 3.3%. (Source: การสารวจผูส้ ู งอายุในประเทศไทย พ.ศ. 2550)
Persons
350,000
310,101
300,000
250,000
Spouse
Son
Daughter
Son-in-Law/Daughter-in-Law
Family
214,624
200,000
150,000
100,000
50,000
0
Relatives
92,055
Market
52,605
24,674
25,067
25,82715,516
773
2,225
2,573
Grandchildren
Brother/Sister
Relatives
Friend/Neighbor/Known People
Nurse/Nursing Aid
Servants/Employee
Others
Main Caregiver in Urban and Rural
Currently Main Caregiver
Urban-Area
Rural-Area
Spouse
24.6
29.6
Son
11.8
12.1
Daughter
38.0
41.6
Son-in-Law/Daughter-in-Law
6.7
7.0
Grandchildren
2.9
3.6
Brother/Sister
1.8
2.1
Relatives
3.2
3.2
Friend/Neighbor/Known People
0.9
0.0
Nurse/Nursing Aid
0.3
0.0
Servants/Employee
8.8
0.7
Others
0.8
0.1
100.0 (241,446)
100.0 (524,594)
Total (No. of the Elderly who have caregivers)
The pension system : Challenges
However, currently, Thai government has
been preparing to extend the coverage of
current pension system to all citizens,
including the informal workers, by
introducing the National Saving Fund which
will be contributed by government and
member.
Policy Recommendation
• Extend the retirement age
–Increase Thailand Productivity
–Reduce Fiscal Burden/Budget
• Supporting National Saving Fund for Long Term
Care
64
Health Care System : Challenges
Health care system
The Thai health care systems are publicly
managed
 Civil Servant Medical Benefit Scheme (CSMBS)
 Universal Coverage Scheme (UCS)
 Social Security Scheme (SSS)
**These systems provide universal coverage for
all citizens but their financing are relied heavily
on tax revenue **
Key characteristics of health care system in Thailand
CSMBS
UCS
SSS
Government employee,
The rest Thai population,
Private employee in
pensioners and their
who are not qualified to
formal sector
dependents
CSMBS and SSS.
Coverage (% of pop.)
7%
76%
15%
Source of funds
General tax
General tax
Tri-parties contributed
Eligible group
by employee, employer
&government
Payment mechanism
Fee for service for OP,
Capitation
Capitation
No
No generally, only for
DRG for IP
Copayment
No generally, but only
for some inpatient care
some services beyond
and for private hospitals
budget ceiling
Per capita expense
12,100 Baht
2,200 Baht
1,800 Baht
(as of 2008)
(about 403.33 US$)
(about 73.33 US$)
(about 60.00 US$)
The health system : Challenges
 The key challenges are that they have relied
heavily on public finance through general tax
and channels for financial contribution from
beneficiaries, e.g. copayment and premiums, are
limited.
 The government subsidies are unequally
distributed among schemes in terms of
coverage and per capita expense, e.g. CSMBS is
the most subsidized scheme but its coverage is
only 7 percent of total population.
The Health Insurance Model
Future Challenges
 The Cost of health care will continue to
increase
 The increase inequality among schemes
needed to be solved
 Fiscal Burden and Risk!
Fiscal Burden due to CSMBS system
Fiscal Burden from Health Care
ล้านบาท
2,500,000
ขยายตัวเฉลี่ยร้อยละ 3.57 ต่อปี
2,151,010
2,000,000
1,500,000
1,000,000
500,000
232,704
UC มีสดั ส่วนเพิ่มขึน้ จากร้อยละ 63.4 ในปี
2557 เป็ นร้อยละ 90.4 ในปี 2606
2557
2559
2561
2563
2565
2567
2569
2571
2573
2575
2577
2579
2581
2583
2585
2587
2589
2591
2593
2595
2597
2599
2601
2603
2605
0
ระบบ UC
ระบบประกันสังคม 4 กรณี
ระบบ CSMBS
สวัสดิการรักษาพยาบาลรวม
71
Policy Recommendation
Distributed the risk: Cost Sharing
(Fair/Equity/Equality/Efficiency?)
Covered both Formal and Nonformal Sectors
Reform the CSMBS System
72
การ Distribution of Risk
UC
Healthy VS. Non Healthy
CSMBS
High Income Vs. Low Income
SSS
Working Gr. Vs Aging
Independent Organization to Control and Manage
(Negotiate with Health Care Center and taking care of financial
Situation)
UC
CSMBS
SSS
73
Increasing the Base of Social Security Coverage
3,000 Baht/Capita
UC 20 Million
SSS
10 Million
UC (with families) 30 Million
3,800
Baht/Capita
CSMBS
4.5 Million
SSS (with families) 30 Million
2,150 Baht/Capita
74
CSMBS Reform
Preventive
Healthcare
Gate-keeper system
Incentives through
drug pricing
structure
75
Thank you for your kind attention
Contact: [email protected]
[email protected]