Underemployment and Wage Penalty in Thailand

Akkaya Senkrua

Abstract

Underemployment is a severe form of human resource underutilization. Nevertheless, underemployment has received little attention vis-à-vis unemployment. As a result, this research investigates the scale of underemployment in Thailand using time-related, income-related, and skill-related underemployment measures. In addition, this research also examines the effect of underemployment on earnings, i.e., wage penalty. The study relies on education as a skill proxy and overeducation as a labor underutilization proxy. By using the selection-corrected two-step method, the results indicate that the underemployment rate is highest under the skill-related method and that the wage penalty is highest under the income-related method. The findings also reveal that underemployed workers suffer wage penalties. In other words, underemployed workers earn less than correctly-matched workers. Specifically, this study aims to measure the extent of underemployment in Thailand and determine the effect of underemployment on earnings. This work's novelty lies in using different measures of underemployment to quantify the extent and effect of underemployment on earnings. Essentially, the scale of underemployment and wage penalty is influenced by the measures of underemployment.

 

Keywords: time-related underemployment, income-related underemployment, skill-related underemployment, overeducation, wage penalty.


Full Text:

PDF


References


BAIDOO, E. (2018). Investigating underemployment in South Africa. Doctoral dissertation, Department of Economics, University of the Western Cape.

BARDASI, E., & TAYLOR, M.P. (2005). Marriage and Wages. Colchester: Institute for Social and Economic Research, University of Essex. Retrieved from https://www.iser.essex.ac.uk/files/iser_working_papers/2005-01.pdf

BAUER, T. (2002). Educational mismatch and wages: a panel analysis. Economics of Education Review, 21(3), 221–229. https://doi.org/10.1016/S0272-7757(01)00004-8

BECKER, G.S. (1993). Human Capital – A Theoretical and Empirical Analysis, with Special Reference to Education. 3rd ed. Chicago, Illinois: The University of Chicago Press.

BEUKES, R., FRANSMAN, T., MUROZVI, S., & YU, D. (2017). Underemployment in South Africa. Development Southern Africa, 34(1), 33-55. https://doi.org/10.1080/0376835X.2016.1269634

CAROLEO, F.E., & PASTORE, F. (2018). Overeducation at a Glance: Determinants and Wage Effects of the Educational Mismatch, Looking at AlmaLaurea Data. Bonn: Institute of Labor Economics (IZA). Retrieved from https://www.econstor.eu/bitstream/10419/90000/1/dp7788.pdf

DOMFE, G., OSEI, R.D., & ACKAH, C. (2013). Determinants of Types of Underemployment in the MiDA Intervention Zones of Ghana. Journal of Developing Country Studies, 3(12), 33–47.

DOOLEY, D., PRAUSE, J., & HAM-ROWBOTTOM, K.A. (2000). Underemployment and depression: Longitudinal relationships. Journal of Health and Social Behavior, 41(4), 421–436. https://doi.org/10.2307/2676295

FERNÁNDEZ, C., & ORTEGA, C. (2008). Labour Market Assimilation of Immigrants in Spain: Employment at the Expense of Bad Job Matches? Spanish Economic Review, 10(2), 83-107. https://doi.org/10.1007/s10108-007-9032-4

GRILLICHES, Z. (1977). Estimating the returns to schooling: some econometric problems. Econometrica, 45(1), 1-22. https://doi.org/10.2307/1913285

ISLAM, M.A., & KAMARUDIN, S.B. (2018). Analysing and Forecasting the underemployment trend in Malaysia. International Journal of Social Science and Economic Research, 2(1), 2018-2032. Retrieved from http://irep.iium.edu.my/54319/1/ijsser_02__124_Published.pdf

KIKER, B.F., SANTOS, M., & OLIVEIRA, M. (1997). Overeducation and Undereducation: Evidence for Portugal. Economics of Education Review, 16(2), 111-125. https://doi.org/10.1016/S0272-7757%2896%2900040-4

KLER, P. (2005). Graduate overeducation in Australia: A comparison of the mean and objective methods. Education Economics, 13(1), 47-72. https://doi.org/10.1080/0964529042000325207

LI, J., DUNCAN, A.S., & MIRANTI, R. (2015). Underemployment among Mature-Age Workers in Australia. Economic Record, 91(295), 438-462. http://doi.org/10.1111/1475-4932.12219

MAYNARD, D.C., & FELDMAN, D.C. (eds.) (2011). Underemployment: Psychological, economic, and social challenges. New York: Springer. https://doi.org/10.1007/978-1-4419-9413-4

MINISTRY OF LABOR. (2018). Thai labor market situation in 2018. Department of Employment. Retrieved from https://www.doe.go.th/prd/assets/upload/files/lmia_th/07ffd234e5cd52d48d4b64014c121ecb.pdf

MORIN, R. (2013). The disappearing male worker. Pew Research Center. Retrieved from https://www.pewresearch.org/fact-tank/2013/09/03/the-disappearing-male-worker/

MULLER, C. (2009). An analysis of the extent, nature and consequences of female part-time employment in post-apartheid South Africa. Doctoral dissertation, Faculty of Management Studies, University of KwaZulu-Natal. Retrieved from https://researchspace.ukzn.ac.za/bitstream/handle/10413/4561/Muller_Colette_2009.pdf?sequence=4&isAllowed=y

OFFICE OF THE EDUCATION COUNCIL. (2022). Average years of schooling by age group. Thaiedeva. Retrieved from http://m.thaiedeva.org/index.php?r=site&year=2563

OFFICE OF THE NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT COUNCIL. (2017). Poverty line by regions. Retrieved from http://social.nesdc.go.th/SocialStat/StatReport_Final.aspx?reportid=854&template=2R1C&yeartype=M&subcatid=59

PAWEENAWAT, S., & VECHBANYONGRATANA, J. (2015). Wage Consequences of Rapid Tertiary Education Expansion in a Developing Economy: The Case of Thailand. The Developing Economies, 53(3), 218–231. https://doi.org/10.1111/deve.12078

PHOLPHIRUL, P., KHONG-NGERN, D., & THOWLADDA, K. (2016). Educational Mismatches and Labor Market Outcomes. Development Economic Review, 10(2), 119-149. Retrieved from https://so06.tci-thaijo.org/index.php/NER/article/view/73165/58853

RUMBERGER, R. (1987). The Impact of Surplus Schooling on Productivity and Earnings. The Journal of Human Resources, 22(1), 24-50. https://doi.org/10.2307/145865

SAZALI, N.T., & TUMIN, S.A. (2020). Leaving no worker behind: Deficit in decent work. Khazanah Research Institute. Retrieved from http://www.krinstitute.org/assets/contentMS/img/template/editor/Deficit%20in%20decent%20work_20200304%20(1).pdf

SENKRUA, A. (2015). The Mismatch in Thai labor market: Overeducation. Journal of Economics, 19(1), 92-116. Retrieved from https://www.econ.cmu.ac.th/econmag/journals/issue19-1_4.pdf

SENKRUA, A. (2019). Status and contributing factors of underemployment in Thailand. International Journal of Business, Economics and Law, 20(5), 229-241. Retrieved from https://www.ijbel.com/wp-content/uploads/2020/03/IJBEL20_264.pdf

SPENCE, M. (1973). Job Market Signaling. Quarterly Journal of Economics, 87(3), 355-374. https://doi.org/10.2307/1882010

TAM, H. (2010). Characteristics of the underemployed and the overemployed in the UK. Economic & Labour Market Review, 4(7), 8-20. https://doi.org/10.1057/elmr.2010.92

TEERASWAT, P., CHUTO, P., GRAY, R., & KOWATANAKUL, R. (2002). The Underemployment in Thailand. Bangkok: The Thailand Research Fund.

VARAKAMIN, D. (2017). Education and Skill Mismatches in Maptaphut Industrial Estate, Thailand. Journal of Reviews on Global Economics, 6, 233-238. https://doi.org/10.6000/1929-7092.2017.06.22

WANNAKRAIROJ, W. (2013). The Effect of Education and Experience on Wages: The Case Study of Thailand in 2012. Southeast Asian Journal of Economics, 1(1), 27-48. Retrieved from https://www.econ.chula.ac.th/public/publication/journal/2013/southeast%20asian%20journal_2.pdf

WILKINS, R. (2004). The Extent and Consequences of Underemployment in Australia. Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. Retrieved from https://melbourneinstitute.unimelb.edu.au/assets/documents/hilda-bibliography/working-discussion-research-papers/2001-2004/Wilkins_The_Extent_and_Consequences_of_Underemployment.pdf

WILKINS, R. (2007). The Consequences of Underemployment for the Underemployed. Journal of Industrial Relations, 49(2), 247-275. https://doi.org/10.1177/0022185607074921


Refbacks

  • There are currently no refbacks.