Chapter 15
Married Women's Labor Supply, Child Rearing, and Public Policy in Thailand¹

INTRODUCTION
MARRIED WOMEN's LABOR SUPPLY AND CHILD REARING
CHILD-REARING SUPPORT POLICY
CONCLUSION
References

Worawet Suwanrada

INTRODUCTION

The decline in fertility is no longer the specific problem of developed countries. According to the demographic projections in the United Nations’ World Population Prospects (2003), there exists a similar trend of fertility decline in the Association of Southeast Asian Nations (ASEAN).² As shown in Table 15.1, on average, each country's total fertility rate will decrease in the next fifteen years. In some countries, such as Singapore and Thailand, the ratio of the population over 60 years to the total population has increased dramatically to more than 20 percent. The reality of an aging society in the ASEAN countries is therefore not so distant.

This chapter will focus on the decline in fertility in Thailand, as one case study, and specifically on the so-called “child-rearing support policy.” According to the National Statistical Office's Population and Housing Census, fertility, defined as the mean number of children born per married woman aged 15–49 years, has decreased sharply in the last three decades. At the national level, it was 4.69 in 1970 but fell to 3.84 and 2.36 in 1980 and 1990, respectively. The latest census in 2000 indicates that the fertility rate has fallen lower than the replacement level at 1.88.

There is no consensus on the causes of this declining trend in fertility in Thailand. As a preliminary exercise, it is worth reviewing some of the changes in the attitudes of women

¹ This chapter is a revised version of Worawet (2003) which was presented at the Meeting on Demographic Dividend, organized by the Thailand Research Fund and College of Population Studies, Chulalongkorn University, on November 6, 2003. Financial support from the Thailand Research Fund is acknowledged. I am grateful for constructive comments from Bhassorn Limanonda, Decha Sunkasuwan, Kua Wongboonsin, Santhat Sermsri, Thienchay Kiranandana, Kaemthong Indaratana and other participants at the conference.

² See Wongboonsin (2003).

and/or families. It seems that the decline in fertility does not entirely reflect the drastic changes in Thai women's preferences or attitudes to marriage. The results of some field surveys suggest that most Thai females are still positive in their attitudes toward marriage.

Using the 1996 Thailand Contraceptive Prevalence Survey, Varangrat (1997) found that nearly 70 percent of single women think that married life is important. The earlier work of Wongsith (1992) also indicated that, in the rural areas, only about 27 percent of males and females agreed to a single lifestyle. Nonetheless, the Population and Housing Census during the last three decades suggests that marriages are taking place later. The singulate mean age at first marriage (SMAM) at the national level was 22.0 years in 1970. This rose gradually to 22.8, 23.5, and 24.0 in 1980, 1990, and 2000, respectively,³ suggesting that the age at the first birth of a child is also higher. Finally, Thongthai (2001) found that a higher SMAM significantly affects a woman's fertility. Besides attitudes toward marriage and its timing, there is also the trend toward a decrease in the desired number of children reported in some field surveys. For example, the Surveys of Attitudes toward Children conducted in 1988 and 1993 show that at the national level, the desired number of children for married women aged between 15 and 49 years was 2.65 and 2.42 on average, respectively. In the recent survey by Thongthai (2002), under the Kanchanaburi Project, it was found that the ideal number of children was only 2.00.

This chapter focuses on two potential economic causes of infertility: involvement of married woman in the labor market, and the cost of child rearing. First, a review will be made

³ National Statistical Office, Population and Housing Census, Office of the Prime Minister, various census years.

of the current situation of child rearing in Thai families, in terms of both time and resources, by using various statistical data and reports. Then a look will be taken at Thai families with children who are socially supported by public policy and/or other means, and at the problems of the current child-rearing support policy. The focus will mainly be on three schemes, namely, tax, social security, and occupational welfare schemes, which mostly support families in terms of income-in-kind. At the same time, the “time support” policy (will be explored).

MARRIED WOMEN's LABOR SUPPLY AND CHILD REARING

Married Women's Labor Supply

Figure 15.1 shows the change in the female labor force participation rate, employed labor force rate, and employed labor force rate at various ages. The labor force participation rate of women was higher than 70 percent in the second-half of the 1980s but it decreased gradually to approximately 60 percent after 1992 before stabilizing at 61 to 63 percent in recent years. However, it should be noted, that the decline in the female labor force

participation rate after 1992 was brought about by the increase in duration of compulsory education from six years to nine years in that year.

The change in the employed female labor force rate is shown in Figure 15.1 (dotted line). On average, throughout the seventeen-year period after the mid-1980s, almost 60 percent of the female population over 15 years of age was employed. In terms of their age profile, the number of those aged 25–34 years (SMAM was approximately 24), did not change much over time. On average, the change was about 17 percent. From the Report of the Labor Force Survey (First Quarter, 2003), 20.3 percent of employed women were single, compared with 69 percent who were married. Also important was how long the employed women worked. Because of time constraints, a higher involvement in the labor market may reduce the time available for childcare. Table 15.2 shows the distribution of employed women classified by age and hours worked. It was found that more than 65 percent of employed women worked more than eight hours per weekday, while nearly half of them worked more than nine hours per weekday. Moreover, approximately 30 percent of the entire number was in the age range of 15–35 years, a prime period for pregnancy, and they worked more than forty hours per week.

Childcare Givers

The above discussion confirms the high involvement of Thai women in the labor market. In addition, about 70 percent of the married women in the labor force are working. This fact raises the issue of childcare, especially preschool, during the day time.

Table 15.3 shows the distribution of childcare givers for children aged 0–5 years from the Report of the Children and Youth Survey, 2002. The childcare givers are classified into parents, grandparents or other relatives, daycare centers, child development centers

or schools, and others (private babysitters, servants). It shows that for children aged 0–2 years, the absence of parents during working hours is filled mostly by grandparents or relatives. Only 3.7 percent of these children are taken care of by daycare centers, or child development centers, set up publicly or privately. In the case of children aged 3–5 years, most parents use daycare centers, child development centers, or school childcare services. At the same time, the role of grandparents or relatives has diminished. Nevertheless, the Population and Housing Census found that the size of the household in Thailand has become smaller in the last three decades, decreasing from 5.8 persons per household to 5.1, 4.3, and 3.7 persons in 1980, 1990, and 2000, respectively. In addition, the ratio of households “living with relatives” has declined. It was approximately 31.6 percent in 1970 but dropped to 28.7 percent in 2000. If this trend continues, working married women and/or their working spouses cannot rely on their parents or relatives to take care of preschool children (0–2 years).

Child-rearing Cost

Besides the problem of the lack of childcare givers, the cost of child rearing is another potential cause for a decline in the family's desire for children. In terms of the Report of the Household Socio-Economic Survey, it was found that the average debt of Thai households has increased gradually in the last decade. In the household survey of 2002, the average debt was approximately 79,000 baht (in 1998 prices), which is 600 percent of the average household income. Moreover, more than 60 percent of the debt was used for household consumption. In such circumstances, for a family to have, and to take care of, an additional child would mean a heavier economic burden. The economic burden of

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childcare results from both a direct cost and an indirect cost (opportunity cost). The former is the direct expenditure of a family on child rearing, such as food, clothing, education, medical services, and miscellaneous costs, as well as various costs for public goods shared with others. The opportunity cost is the foregone income of mothers (or fathers) who take care of children instead of working.

Owing to the limitations of time series data on the direct costs of child rearing, it is difficult to grasp its change over time systematically. However, some proxy variables can be used to calculate the level of child-rearing costs. Using the National Statistical Office's Report of the Household Socio-Economic Survey, some items of household expenditure paid directly for childcare can be identified as these are indicated clearly in the report. They include, for instance, clothing for boys and girls, sewing services, footwear, babysitters, and education. In order to compare the change, this expenditure was calculated at 1998 constant prices. It was found that after 1990, the direct cost of child rearing increased gradually. In the 2002 survey, the costs for the average household amounted to approximately 4,000 baht per year, or 5.17 percent of the household income (Figure 15.2).

Another source of data, which shows the current costs of child rearing, is the Children and Youth Survey. The average annual expenditure on education per person of children and youths aged between 3 and 24 years can be obtained from this source. The expenditure on education consists of school fees, book materials and equipment, uniforms, transportation, food bought outside the home, and others (such as fees for special classes after school).

Table 15.4 shows the education costs for children and youths, by type of school and educational level. If costs for the same level of education are compared, it is clear that going to public school requires less money. When compared with the national average household

income in 2002 of 13,376 baht, derived from the Report of the Household Socio-Economic Survey, having a child clearly increases the economic burden for households.

The opportunity cost of childcare occurs when a father or mother quits the labor market in order to take care of the children and income is foregone as a result. Here, the case is considered of a mother who sacrifices her job and leaves the labor market. As a proxy for the mother's foregone income, the real wage rate per month (in 1998 prices) of female private employees in urban areas is used. From Figure 15.3, it is found that, after 1991, the real wage rate per month increased sharply, thus raising the opportunity costs. In addition, such costs are seen in terms of the comparative advantage between the father and the mother by considering the difference between the male real wage rate per month and that of the female in private employment. The opportunity costs for women have increased in the last fifteen years.

CHILD-REARING SUPPORT POLICY

The discussion above explored the current situation of the family in Thailand and found that the female labor force participation rate is high, parents obtain some help in child rearing (especially for children of 0–2 years) from grandparents or relatives, the size of the family has become smaller, the ratio of families “living with relatives” has tended

to decrease, and both direct and indirect costs of child rearing have increased. A study is now made on how Thai families are supported by the state in terms of child rearing under the current system.

According to Tomura (2002), child-rearing support in Thailand is implemented through at least three channels: the fiscal welfare scheme, the social security scheme, and the occupational welfare scheme (Table 15.5).

Income Tax Scheme

Under the current Income Tax Code of Thailand, the income tax scheme supports families with children by providing child-related income deductions. Naturally, such deductions are excluded from an individual's tax base, and the taxpayer can derive benefits from this scheme in the form of a reduction in the tax burden. Income deductions of 15,000 baht are given per child born before 1979, and 15,000 baht per child for up to three children born after 1979, provided they are below 25 years of age, and are still studying at the higher education level. Deductions of 2,000 baht per child are also given for a child currently at school. In the case of working couples, they can make a declaration of their earnings to the revenue department separately and each can apply for half of the deductions.

Social Insurance Scheme

Under Thailand's current social security system, there are two pillars which support the family: social insurance, and public assistance. The Social Security Fund was initiated in 1993 under the Social Security Act and participation is currently mandatory for enterprises with one or more employees. Both employees and employers must each contribute 4 percent of the wages of the employee while the government pays 2 percent toward this fund. This fund provides for six types of benefits for the insured persons: for illness or injury, maternity, disability, death, child allowance, and old-age pension. The details of benefits for child rearing are given in Table 15.6. Employees in private enterprises obtain child-rearing support as income-in-cash from the fund, in the form of maternity pay and child allowance. In order to compare with child allowances, it is important to bear in mind that this allowance is paid for comprehensive objectives, which include childcare in general, fees for education, or medical treatment. Moreover, the duration of the payout is only six years (for children from 0 to 6 years old).

The Private School Teachers and Headmasters Mutual Fund was started in 1975 for teachers and headmasters in private schools established under the Private School Law. Teachers and staff of schools must contribute 3 percent of their wages toward this fund

while the government pays 6 percent of their wages. After retirement, the teachers receive a pension, but before retirement, they and/or their families (wife, children, and parents) can obtain various types of benefits, such as for illness and injury, death, child allowance, and children's education fee subsidy. Here, the focus will be only on child-rearing related benefits.

As shown in Table 15.7, under some conditions, teachers with children less than 18 years old can obtain a child allowance at the rate of 50 baht per child per month. In addition, education fees paid for children between the ages of 3–25, who are in school

are also subsidized by this mutual fund. The amount of subsidy depends on the type of school (public or private) and the education level. Moreover, private school teachers are subsidized for medical fees for treatment of illness or injury of his/her spouse and children, including maternity fees.

Public Assistance Scheme

The Public Assistance Scheme in Thailand aims to provide the target groups—those who are disabled from birth or by accident—with sufficient income for basic living. According to Chandoevwit (2001), within the framework of public assistance in Thailand, there are two target groups. The first consists of children, youths, women, the elderly, the physically challenged, AIDS victims, hilltribe people, and so on. The authority in charge is the Department of Social Development and Social Welfare under the supervision of the Ministry of Social Development and Human Security. In addition to long-term assistance for the elderly and the disabled, help for children and their families (child-rearing related support) is also given for the short term.⁴ For instance, children from poor families are eligible for a cash payment of 1,000 baht per child, with an upper limit of 3,000 baht if the number of children exceeds three. A family whose head is absent because of death, handicap, or long-term illness, can obtain cash of 2,000 baht per family but this cannot exceed three times. Disabled children are eligible for 1,000 baht in cash, and some income-in-kind.

Another target group for public assistance is veterans and their families, who are subsidized by the War Veterans Organization of Thailand (WVO) under the royal patronage of

⁴ Department of Social Development and Social Welfare, Handbook for Social Development and Social Welfare Network Expansion Training, from http://www.dsdw.go.th.

His Majesty the King. This organization was established under the War Veterans Organization Act in 1948 (amended in 1967) and aims to support veterans and their families through welfare schemes, job search, and labor training, as well as medical care. Needless to say, child rearing is also supported in many forms for these veterans’ families, as shown in Table 15.8. The magnitude of assistance or subsidy depends on the type of veteran. Soldiers can also obtain maternity pay (700 baht per birth).

Occupational Welfare

If any member of a family is eligible to receive benefits relating to child rearing from his/her employer, such benefits are called “occupational welfare,” or fringe benefits. There are two kinds of occupational welfare: benefits for government employees, and those for private employees. There are also benefits-in-cash (or benefits-in-kind) and child-rearing time support. Tomura (2002) suggests that there are possibly four kinds of family child-rearing time support, namely, maternity leave, short paternity leave for fathers, leave to attend to sick children, and long-term child-rearing leave. Next, the occupational welfare in terms of both benefits-in-cash and time support will be examined.

Public officers receive various types of benefits from their employer (the Thai government), including child allowance, and subsidies for education fees, and medical treatment. The details are shown in Table 15.9. Although the amount of child allowance received from the government (as employer) is not much, fees for education and medical treatment for public officers are almost fully subsidized. On the other hand, in terms of time support, married government officers are eligible for paid maternity leave of ninety

days. There is currently no short-term paternity leave for fathers, leave to attend to sick children, or child-rearing leave.

Although child-rearing support is not compulsory for employees in the private sector, they are covered under the framework of the Labor Protection Act for maternity leave before or after giving birth (for ninety days, forty-five of which are paid leave) and also for temporary changes of position before or after giving birth. Nevertheless, according to the Wages, Salary and Benefits Survey of 1997–1998, some subsidies for child rearing are given by a few private enterprises. In the eighty-five enterprises surveyed, 28.5 percent of them subsidized maternity leave. Moreover, 23 percent provided paternity leave for fathers. Of this group, most of them (63 percent) approved leave of two to five days, and 32 percent of them also subsidized the education fees for their employees’ children. These findings suggest that the enterprise-based child-rearing policy has not yet filtered into the Thai enterprise system.

Current Challenges

Child-rearing support in Thailand is given in the form of a combination of fiscal support, social security, and occupational welfare. Moreover, the means of support are both in cash and time. Unfortunately, there is still no universal child-support system at present. According to the TDRI Labor Survey,⁵ in the first quarter of 2003, there were 19,447,501 workers in the informal sector without child support from the public sector. There are also problems with the current system apart from the issue of coverage.

To begin with, there is some disparity in the types of support, depending on occupation and status. There seems to be a large gap in terms of the amount of subsidy (Table 15.10). For example, in the case of maternity benefits, private school teachers, government officers, and war veterans can claim part of the fees for medical treatment, or even the full fee, depending on the situation. In contrast, employees in the Social Security Fund Scheme get only a lump sum of 4,000 baht. The same problem arises for children's medical expenses and education fees.

In terms of the duration of support, the disparity among occupations or status is apparent. Child allowance for employees in the Social Security Fund Scheme is paid only for six years, or 2,400 baht per year. This amount is not sufficient to even cover the average education expenses for any level of public school (Table 15.4). In contrast, private school teachers and government officers can obtain long-term support.

Under the present tax system, child support relates to two types of income deduction for families who earn income. In principal, the income tax scheme provides the broadest support, in the sense that anyone who earns income will benefit. Nevertheless, the level of income must be high enough to qualify for the deductions. Thus, if taxpayers who have

⁵ http://www.info.tdri.or.th/labor/index.htm

children earn an income below the necessary threshold, they will not obtain the benefits of the tax scheme.⁶ Moreover, the structure of benefits is naturally regressive.

Finally, there is the problem of a lack of support over the long term. As suggested earlier, the child support scheme in Thailand at present concentrates on subsidies and the maternity leave support time is not sufficient to compensate for the labor hours foregone by women with children. Only maternity leave before or after childbirth, of ninety days is guaranteed. Thus, longer-term child-rearing leave should be considered as a policy choice in future system reforms.

⁶ According to Suwanrada (2003), the level of such threshold income is as follows: Husband 1 Wife (Housewife) 1 1 Child: 100,000 baht; Husband 1 Wife (Housewife) 1 2 Children: 100,000 baht; Husband 1 Wife (Work) 1 1 Child: 50,000 baht; Husband 1 Wife (Work) 1 2 Children: 50,000 baht; Single Mother 1 1 Child: 50,000 baht; Single Mother 1 2 Children: 50,000 baht.

CONCLUSION

This chapter has focused on the decline in fertility in Thailand, especially its two potential economic causes: the involvement of women in the labor market, and the cost of child rearing. It has reviewed the current situation of the family in Thailand and found that the female labor force participation rate is high, parents obtain some help for child rearing (especially for children below the age of two) from grandparents or relatives, the size of the family has became smaller, and the proportion of “family living with relatives” has tended to decrease, while both direct and indirect costs of child rearing are increasing.

The chapter also looked at those Thai families with children who are socially supported through public policy and/or other means, and has outlined some of the problems of the current child-rearing support policy. This policy combines fiscal welfare, social security welfare, and occupational welfare. Nevertheless, child support is still unevenly distributed according to work status or occupation, such as private employees, government officers, private school teachers and headmasters, and war veterans. The rate of coverage is not clear at present because of the problem of matching data between the work status of husband and wife. The types of benefits under each scheme are mostly income-in-cash subsidies. Moreover, the amount of subsidy received varies among recipients. Private employees under the Social Security Scheme receive a lump-sum subsidy, while, depending on circumstances, government officers and private school teachers receive fully subsidized education fees and medical expenses for their children. In addition, under the tax scheme, income deductions for young and school-going children benefit only families with comparatively higher incomes. Support for childcare givers in child rearing is limited, with only a short period of ninety days before or after childbirth.

For the future, at least two child-rearing reforms should be considered. The first is to change the system away from support based on occupation/work status to universal coverage, or conditional coverage, by giving child allowances. Of course, in this case, if the system is also designed to address equity issues then some harmonization will be needed between the tax and social security systems. The second reform should promote occupational welfare or enterprise-based welfare schemes, especially for long-term support.

References

Chandoevwit, W. 2001. Social protection and unemployment insurance [in Thai]. Proceedings of the TDRI conference.

Suwanrada, W. 2003. Public policy towards women's child rearing and labor supply in Thailand [in Thai]. Paper presented at the meeting on demographic dividend, Thailand Research Fund and College of Population Studies, Chulalongkorn University, November 6.

Thongthai, V. 2001. Age at rst birth: An important determinant of low fertility [in Thai with English summary]. Proceedings of the 1997 Thai National Symposium on Population Studies, Thai Population Association.

Thongthai, V. 2002. Ideal family size of women in reproductive age of Kanchanaburi project [in Thai with English summary]. Proceedings of the 2002 Thai National Symposium on Population Studies, Thai Population Association.

Tomura, A. 2002. Family policy: International comparison [in Japanese]. In National Institute of Population and Social Security Research, Support for Child Rearing in a Child-Burst Society. Tokyo University Press.

United Nations. 2003. World Population Prospects.

Varangrat, A. 1997. Nuptiality transition in Thailand [in Thai with English summary]. Proceedings of the 1997 Thai National Symposium on Population Studies, Thai Population Association.

Wongboonsin, P. 2003. Demographic dividend: Opportunities and challenges of ASEAN in the 21st century [in Thai]. Paper presented at the Meeting on Demographic Dividend, Thailand Research Fund and College of Population Studies, Chulalongkorn University, November 6.

Wongsith, M. 1992. Attitudes toward family values in Thai society. IPS Publication No. 205 [Thai].