New paper on the evolution of income inequality in Thailand (WID.world Working Paper 2018/15)

This new paper by Thanasak Jenmana sheds new light on the dynamics of income inequality in Thailand between 2001 and 2016. Data series related to this work are now available on WID.world.

Combining household survey data with fiscal data and national accounts, this paper shows that the level of inequality in Thailand is significantly worse and has not decreased as much as survey data alone suggests. The top 10% share of national income went from 56% in 2001 to 53% in 2016. Meanwhile, the bottom 50% owned 9% of national income in 2001 and 13% in 2016. As a result, in 2016 the average income of the bottom 50% was twenty times lower than the top 10%’s average. This research also decomposes income into its labor and capital components, and shows the increasing importance over time of capital income amongst the richest 1% of the Thai population.

Pre-tax national income shares

The observed inequality dynamics is put into perspective with the recent political conflicts in Thailand. Since 2001, the average income of the middle class has been growing at a slower rate than for the bottom 50% and the richest 10%. This paper argues that this phenomenon reflected a shift in political relations due to systematic mobilizations of the poor in party politics. Losing its political and economic power, the middle class showed strong reactions which manifested themselves in the two recent coups d’état. This political evolution is evidenced by the rise of class cleavages in Thai voting behavior since 2001, as underlined in the paper using data from the Comparative Study of Electoral System.