GENDER IN INFORMAL EMPLOYEMENT KNOWLEDGE MANAGEMENT NOTE 5 GENDER AND INFORMAL WORK IN THAILAND Introduction the labor market. Aware of these problems, the government does have in place policies such as Thailand has made good progress social security and maternal and paternal leave to in closing gender gaps in various support citizens of both genders working in formal dimensions, especially human capital employment. The World Bank team has conducted development (i.e., health and education). a brief study on Gender in Informal Employment to Thailand’s structural economic transformation has reduce the information gap; this knowledge note altered how women participate in the labor market; summarizes the full report, which can be found on for instance, many of them have moved from unpaid the World Bank Bangkok website. informal to paid formal jobs. Investment in women’s education has improved their employment rates Thailand’s labor force participation rate and wages, narrowing the gender wage gap. The (LFPR) is 94 percent for men and 80.5 Thai gender wage gap in labor force participation percent for women; both have been of 16 percentage points (pp) compared with the relatively stable since 2017. Although male worldwide average of 26 pp (ILO 2019). LFPR sharply increased between the age groups 20–24 and 25–29, the LFPR remained stable until However, the progress, though obvious, age 55, and then began to decrease (Thai workers has not done much to get rid of the main become eligible for pensions at 55)(Figure 1). The deterrents discouraging Thai women LFPR for women, however, starts dropping as early from participating more actively in the as age 45. Most women who leave early replace jobs with care of child(ren), sick person, or older labor market. Most of these relate to household family member; often, women have fewer skills or and caregiving responsibilities and the motherhood less education. penalty as well as such standard business deterrents as limited access to credit. Moreover, the pandemic hit women, especially mothers, harder 1 Thai mothers’ lack of proper social assistance leads to motherhood than men and heightened their disadvantages in wage penalties, causing Thailand’s low fertility rate, and it might lead to a deficit in the future workforce (Paweenawat and Liao 2022a). GENDER AND INFORMAL WORK Figure 1: Thailand’s LFPR by gender and age groups (2017–2021) Male Female (%) 100 (%) 100 80 80 60 60 40 40 20 20 0 0 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 >=60 >=60 2017 2018 2019 2020 2021 Source: Micro-data from Informal Employment Survey (IES) 2017–21’ author’s calculation. More than half of jobs in Thailand This explicit definition covers workers in both the informal and the formal economy (DLPW 2018). are considered informal, but though In 2021 the shares of men and women in informal “informal worker” is in general use jobs were similar: men 52.7 percent, women 51.2. throughout the economy, what it In some other regions worldwide, women were disproportionately employed informally, as many as refers to has no precise definition. 80 percent in South Asia, and 74 percent in Sub- Saharan Africa. In 2018 the Department of Labor Protection and Welfare (DLPW) proposed an official definition: In Thailand between 2017 and 2021, informal workers were those not covered by informal employment for the 25–54 group labor protection and social security law as formal held steady at about 65 percent of the total workers are. It was to be applied to workers Thai workforce. However, although the informal entitled to protection but not protected in practice, employment share of male workers decreases as owners of small businesses staffed by themselves they age, that of women does not: among younger and relatives, and entrepreneurs in the informal women 15–24, 30 percent had informal work; economy. among women aged 45–54, the share had risen to nearly 50 percent. It may be that informal work fits a The World Bank team report summarized here life/work cycle: older women In a Thai family tend to adopted the definition of informal employment used fulfill traditional gender roles as primary caregivers by the National Statistical Office of Thailand (NSO) while also bringing in income. Informal work may in its Informal Employment Survey: give them more flexibility (see Figure 2). Informal workers are employed individuals with no labor protection or social security provided by the employer. GENDER AND INFORMAL WORK 2 Figure 2: Proportions of workers in formal and informal employment by gender and age groups Informal-Male Informal-Female 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 15-24 25-34 35-44 45-54 15-24 25-34 35-44 45-54 Formal-Male Formal-Female 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 15-24 25-34 35-44 45-54 15-24 25-34 35-44 45-54 2017 2018 2019 2020 2021 Source: Author’s calculations based on micro-data from IES 2017–2021. Domestic and home-based workers and The ILO (2018) also pointed out that most others employed informally tend to have women who work informally are mainly little access to social protection (ILO in “invisible areas,” such as domestic 2018). Non-agricultural informal workers, such and family work, which gives them little as clerks in retail stores and street vendors, lack opportunity to form groups to secure access to social security and information about basic labor and human rights. Those who their basic rights (Kontip et al. 2015). In 2020 the work informally in agriculture are especially widely Thailand Development Research Institute (TDRI) dispersed, which makes it even harder for them surveyed the working conditions of informally to form networks to negotiate with employers on employed highway installation vendors and found compensation, benefits, and work safety (Ministry they were subject to dangerous circumstances and of Labor 2014). worked longer hours (10 a day) than the labor law allowed. Informal work in Thailand continues to be of low quality (World Bank 2022). GENDER AND INFORMAL WORK 3 Today most informal workers are formal and informal, with women’s wages 2–3 employed in low- and mid-skill jobs and percent higher than men’s. Paweenawat and Liao live in rural areas. About 47 percent of the (2022a) suggested that the main factor in closing the women are in services like sales and restaurants; general gender wage gap was the result of the shift about 45 percent of the men had skilled agricultural from agriculture to manufacturing and service work. and fishery jobs. Both groups are at high risk of There are still gender wage gaps in manufacturing income uncertainty, given agricultural and general (informal work 23 percent, formal 17 percent),but in economic fluctuations. agriculture the formal and informal gaps are about 8–9 percent. Many Thai elderly stay in the labor market after retirement, with a growing number holding down informal jobs. However, there is a major gender gap in LFPR with 47 percent of men continuing to participate in the labor force but only 27 percent of women. For many women, unpaid care responsibilities make it difficult for them to hold down paying jobs, even though many are, as noted, At all educational levels except for highly vulnerable. informal workers with a university education, there are gender wage From 2017 to 2021, men in both formal and informal jobs were paid more than gaps in both formal and informal women, with the gap larger for informal work. employment. Among Thais, those of prime working age the wage gap was only about 4 percent On average, wages for informally employed women for formal work, compared to about 10 percent for with a university degree are higher than men’s informal work. Education was also a factor: women wages by 23 percent, creating a negative wage gap. in informal jobs had less education and tended to Gender wage gaps are also found at all skill levels have less-skilled jobs. except mid-skill formal jobs, for which pay for men and women is similar. However, the gender age gap On average, there was a reversal of the is much smaller in informal than in formal work (see usual gender wage gap in services, both Figure 3). Figure 3: Gender wage gap classified by industry, education, and skill in 2021 100 Industry 80 Hourly Wages (Baht) 60 40 20 0 Agri Manu Service Agri Manu Service (8.4%) (23%) (-1.7%) (9.9%) (16.8%) (-3.4%) male female Source: Author’s calculations based on micro-data from IES 2021. GENDER AND INFORMAL WORK 4 Figure 3: Gender wage gap classified by industry, education, and skill in 2021 (cont.) 120 Education 100 Hourly Wages (Baht) 80 60 40 20 0 Primary Secondary University Primary Secondary University (16.1%) (10.6%) (-23.1%) (11.7%) (15.2%) (15.8%) 150 Skill 120 Hourly Wages (Baht) 90 60 30 0 Low Mid High Low Mid High (13.7%) (2.8%) (4.7%) (22.7%) (-0.3%) (19.3%) male female Source: Author’s calculations based on micro-data from IES 2021. In Thailand, the pandemic affected the informally employed; their income was much lower. employment of different demographic Their situation may demonstrate the disadvantages groups unequally (Paweenawat and Liao of informal work, such as in construction, compared 2022a). Although working hours fell for all groups, to the buffer of formal employment in crises, when wages for female workers with children were less informal work is more sensitive to economic change. than those for workers without children in both formal and informal jobs—a confirmation of the In 2020 the ILO constructed the COVID-19 motherhood wage penalty in the Thai labor market. disruption risk assessment; applied to Thailand, it found that over 50 percent of informally During the pandemic, the wages of employed workers of prime working age mothers with formal jobs fell more than are in low-risk sectors (e.g. agriculture and those with informal jobs. Because informal mining-related work) and over 50 percent of work gave them more flexibility in taking care of those formally employed are in middle-risk sectors family matters, they also had less difficulty finding like real estate and wholesale trade. While 54 care for their children. The only men affected by percent of women with informal jobs are in low-risk the pandemic were those who were childless and sectors, 50.8 percent of those with formal jobs are GENDER AND INFORMAL WORK 5 in middle-risk sector. However, more women are in by government measures and the economy (see high-risk sectors in both formal and informal jobs. Figure 4). Women may have been more vulnerable during the pandemic because their jobs were more affected Figure 4: Share of workers informal employment by sector (2021) 29.8% 29.6% Low Risk 54.0% Formal female 59.9% Formal male 50.8% 56.9% 9 Informal female Mid Risk 8 28.0% 29.7% Informal male 19.4% 13.5% High Risk 18.0% 10.5% 0% 10% 20% 30% 40% 50% 60% 70% Source: Author’s calculations based on micro-data from IES 2021. Most older workers employed informally elderly in rural areas do not use ICT, and many have are in low-risk sectors like agriculture and no interest at all in doing so. The World Bank (2022) fisheries. However, twice as many older women found that more women than men buy and sell on (18.5 percent) as men (9.1 percent) are in high-risk the Internet—especially urban Generation Y women sectors; older women have seen more volatility— with university degrees. perhaps because 27.5 percent are service workers, such as store clerks and waitresses, who were most Because of the risks they face in terms of affected by government lockdown measures. safety, income uncertainty, job security, and lack of pensions, informal workers In 2019 the NSO conducted an Information need the benefits of a social protection and Communication Technology (ICT) survey to find out how familiar women were with ICT and how they might use it more effectively. Internet use by gender was similar (men: 67.5 percent; women: 65.6 percent), Income Safety but the real difference was in the type of work heavier users did: 88.8 percent of women with formal jobs used the internet, compared to just 69.0 percent of those with informal jobs (see Figure 5). Not surprisingly, those living in urban areas used it Pension Job Security more than those in rural; almost 60 percent of the 2 According to Paweenawat and Liao (2022b), examples of low-risk sectors included agriculture and mining-related activities, manufacture of tobacco products, manufacture of wearing apparel, printing and reproduction of recorded media, and land transport and transport via pipelines. Examples of middle-risk sectors included real estate activities, wholesale trade, except of motor vehicles and motorcycles, and food and beverage service activities. Examples of high-risk sectors included retail trade (except of motor vehicles and motorcycles), water transport, air transport, warehousing and support activities for transportation, accommodation, travel agency, tour operator, reservation service and related activities, sports activities and amusement and recreation activities. GENDER AND INFORMAL WORK 6 Figure 5: Share of females in formal and informal employment using internet (2019) Formal Informal 3.4% 0.5% 1.2% 10.3% 7.3% Use 19.5% Others Not use Not needed/not interested 88.8% 69.0% Source: Author’s calculation based on micro-data from Household Survey on the Use of Information and Communication Technology 2019. The primary SPC components in Thailand are to minimize risk in their roles as workers, mothers, social assistance (SA) and social insurance (SI), and caregivers (Cameron 2019). SPCs for women supplemented by assistance programs in the labor in developing countries include health coverage and market. The SPC covers all Thai citizens regardless insurance, maternity leave, child care, employment of gender but has been mainly concerned with protection, a pension, financial inclusion, formal workers. Almost 75 percent of Thai citizens unemployment insurance, and a work program to are covered by SA, but less than 5 percent have help women (e.g., skills trainings and employment SI. In general, the Thai SPC covers only formal services). In Thailand, SPC coverage for informal workers, though there have been attempts to women workers is insufficient and poorly designed. extend coverage to disadvantaged women, informal According to the DLPW (2018), separate laws cover workers, and the elderly. home-based, domestic, and agricultural workers: For workers, unemployment insurance • The Home Workers Protection Act, B.E. 2553 is a significant part of SI. Workers from • The Ministerial Regulation No 14 (B.E.2555), farmers to motorbike and taxi drivers to street issued under the Labour Protection Act, B.E. vendors can access social security by applying to 2541 protecting domestic workers be independently insured under Section 40 of the • The Ministerial Regulation concerning labor Social Security Act (National News Bureau 2020). protection for agricultural workers, B.E. 2557 However, a new study (TDRI 2021) found that up to 5 million workers are gig workers, who had one-time However, informal workers are not entitled temporary employment. Currently, only 5–6 million to other work-related rights that formal people out of a population of 20.3 million contribute workers receive, and in any case, only to social security. some workers are aware of the laws just listed that may affect them. The government Another factor to be taken into account needs to launch a public information campaign to is that because women have a different ensure that workers understand their options. work trajectory than men, they need different SPCs. SPCs for women are strategies GENDER AND INFORMAL WORK 7 Although the Thai government SPC During the pandemic, the Thai covers all citizens regardless of gender, government had an active SPC that several additional programs are directed provided comprehensive coverage (World specifically to women, including maternity Bank 2021a). About 30.7 million Thais received leave, childcare support, and financial intervention social assistance, and the government spent about and inclusion, such as the Women Empowerment 386 billion baht more (about US$11 billion—2.29 Fund (WEF). Paid maternity leave is 14 weeks, the percent of GDP). During the pandemic, about 81.5 minimum requirement of the ILO Maternity Protection percent of Thai households received emergency Convention of 2000 (No. 183). The WEF is one of assistance. only a few financial services for Thai women, though there are local village and motherland funds and Informal workers were significantly savings schemes, mostly managed by women. The affected by the pandemic because they WEF was set up in 2012. Although its interest rates had no income security and were not are low, other aspects of its management need to covered by the SPC. When the epidemic be improved. began, the government initiated an SA program to help informal agricultural workers. Immediately In addition to the WEF, supported by after Covid seemed under control, the government the Thai government, micro-financing started to provide 15,000 baht for informal workers from a number of sources is available (Rao Mai Ting Kun) and additional compensation to women’s community-based income to state welfare cardholders and members of generation groups in both urban and rural areas vulnerable groups, such as children and the elderly. throughout the country. Financing may be provided Also, more than 3 million additional informal workers by local governments or women empowerment subscribed to the Social Security Fund under Article funds. Women’s groups can be significant in local 40. economic development and could provide extra income for families. The International Finance However, none of the new schemes were Corporation, a member of the World Bank Group, gender-responsive. The only SA related to is also contributing to the Women’s Entrepreneurs women with children was designed to reduce the Bonds being issued by the Bank of Ayudhya, the cost of educating them, allocating to parents 2,000 first private sector ‘gender’ bond issued in the Asia- baht in cash per child in primary and secondary Pacific area and the first social bond issued in Asian education. emerging markets (IFC 2019). The IFC also noted that women’s small and medium enterprises do not Nor is the draft Quality-of-Life Development have enough financial access in Thailand. and Protecting Informal Workers Act gender-responsive. The Ministry of Labor As a country, Thailand is aging rapidly, and now has an internal unit, the Bureau for Informal the Thai elderly must continue working Workers, to manage the act once it passes. The because they are “too poor to retire” act would allow informal workers to establish labor (Paweenawat and Liao 2021a). They tend organizations to give them more bargaining power to have informal work and little access to pension and to borrow from a Fund to be created in the schemes. The Old Age Allowance is universal, but Informal Workers Bureau. Ultimately, the objective the benefit is very low. of the draft act is to provide appropriate working conditions and help empower informal workers to make their needs better known. GENDER AND INFORMAL WORK 8 Recommendations Defining Informal Work • Set up a government working group to align The gender and informality study by the the definitions of informal employment used by World Bank Bangkok team led to the following the NSO and the Ministry of Labor. recommendations: • Once the definitions are aligned, collect data on informal workers, set up a database, Gender Dimensions of Informal Work and analyze policies that could improve the • Gender-based social protection schemes situation of informal workers. that relieve constraints and promote equal opportunities are needed for workers in Opportunities for Future Research informal employment. • What discourages women informally employed • Current policies and draft laws should also be from making voluntary contributions to social reviewed to improve work-related fundamental security? What policy would encourage them to rights and to relieve such gender-specific do so? burdens, e.g., pregnancy employment rights • What would promote the participation of and maternity benefits. women in decision-making at the local and • SPC schemes related to childcare assistance national levels (members of the national and work arrangements are needed for female parliament, local government, or specific village workers in Thailand. or livelihood-related committees) and resource- • Improving working conditions and environment sharing to improve their quality of life, health, for female workers in informal employment. and welfare? • The study of the organizations of informal Upgrading Economic Opportunities for workers in other countries and the organizing opportunity/possibility for informal workers in Women Thailand. • Improve financial and credit access of • How can ICT advancement improve women’s women working informally, heighten their activities and opportunities in informal digital literacy, and build their entrepreneurial employment? capacity through training in simplified business • The study of the ‘gender’ bond issued planning, marketing, financial management, in the Asia-Pacific region and Women’s and coaching for both individual women and Entrepreneurs Bonds in Thailand. women’s groups. • Identify alternative sources of financing, particularly grassroots sources, for women micro-entrepreneurs. Relief for the Elderly • Increase the Old Age Allowance to the point where recipients are above the poverty line. Most elderly are still informally employed; they are also poorly educated, live in more remote rural areas, and have little access to social security. • Ensure safety at the workplace for elderly workers in informal employment. • Identify the unique needs of older women who are not in the labor market and must rely more on family members. This gender note was prepared by Associate Professor Sasiwimon Warunsiri Paweenawat, Faculty of Economics, Thammasat University GENDER AND INFORMAL WORK 9