The Impact of a Universal Allowance for Older Persons on Labor Force Participation: The Case of Thailand

This paper assesses the impact of the 2009 implementation of a universal Monthly Allowance for Older Persons on the labor force participation of older workers in Thailand. Using the Thai Household Socio-Economic Survey, we evaluate the effect of the program implementation on labor force participation for older workers aged 61 to 75 years old over the years 2007 to 2011. We apply a standard probit regression to model the work decision and a propensity-score matching approach to address concerns regarding self-selection and endogeneity in the estimation. The expansion of the social pension for the elderly from a targeted to a universal program starting in 2009 has little impact on the overall labor force participation of older persons, but is associated with a decrease in labor force participation by 6 to 7 percent among elderly from low-income households in areas outside the Bangkok metropolis.