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Thailand stands out in international comparison as a country with a high dispersion of productivity across sectors. It has especially low labor productivity in agriculture—a sector that employs a much larger share of the population than is typical for a country at Thailand’s level of income. This suggests large potential productivity gains from labor reallocation across sectors, but that process—which made a significant contribution to Thailand’s growth in the past—appears to have stalled lately. This paper establishes these facts and applies a simple model to discuss possible explanations. The reasons include a gap between the skills possessed by rural workers and those required in the modern sectors; the government’s price support programs for several agricultural commodities, particularly rice; and the uniform minimum wage. At the same time, agriculture plays a useful social and economic role as the employer of last resort. The paper makes a number of policy recommendations aimed at facilitating structural transformation in the Thai economy.
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Developing countries --- Developing countries. --- Agriculture - Economic aspects - Developing countries. --- Developing countries - Population. --- Appropriate technology - Developing countries. --- Technology transfer - Developing countries. --- Urbanization - Developing countries. --- Rural development - Developing countries.
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Economic policy and planning (general) --- Developing countries --- Agriculture and state --- Agriculture --- Economic aspects --- Social Sciences and Humanities. Development Studies -- Development Economics --- ALLW. --- Agriculture and state - Developing countries. --- Agriculture - Economic aspects - Developing countries.
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