The Thai Multi-Pillar Pension System: Extending Pension and Savings Scheme Coverage to Informal Workers

This thesis examines the implications of Thailand’s multi-pillar pension system and its capacity of inclusion for informal workers since 2009. The study then seeks out the causal factors behind the system’s partly successful outcomes, with particular focus on barriers at the local level. The introduction of a new multi-pillar pension model for Thailand was promoted by the World Bank. The core objectives for this included the alleviation of poverty and expansion of social protection to all citizens. The new model marked the first time that informal workers were included in the formal system. However, while non-contributory pension scheme participation is at a record high, many informal workers have not yet joined the voluntary savings scheme. This thesis argues that implementation of the pension reform has shaped not only a broader institutional framework of the pension system, which indirectly affected the reform’s outcomes, but also a new type of welfare state regime. To substantiate these arguments, a combination of different approaches is employed – both in welfare state analysis and comparative-historical analysis – to examine the reform’s barriers of implementation and subsequent outcomes. The typology and macro- configurational aspect of welfare state institutions are used as analytical tools to examine the causal factors and outcomes of the reform. Meanwhile, the characteristics of a hybrid welfare state regime are used to explore the welfare state in Thailand. Using the results of questionnaires and interview data, this thesis found that informality and decentralisation are central to the institutional framework and functioning of the Thai pension system. However, the government has overlooked how both factors constrain the extension of the pension scheme coverage to the informal sector, unintentionally forming a vulnerable group within the current pension system. The thesis argues that developing the pension system alone is not sufficient to effectively extend pension and savings scheme coverage. Instead, the development of other institutions within the country’s system of governance as a whole is also required. This thesis further highlights how the nature of the five-pillar pension model has shaped a new role for the state, market, and family, thus forming a new Thai welfare hybrid, a combination of three welfare regimes: conservative, liberal, and social-democratic. In addition, this thesis concludes that the multi-pillar pension model is more practical and realistic in high-income countries with a small informal labour market. It is not feasible to successfully achieve the core objectives of this model in low- and middle-income countries with large informal labour markets like Thailand.