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Reshaping Thailand's labor market: The intertwined forces of technology advancements and shifting supply chains

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  • Lekfuangfu, Warn N.
  • Nakavachara, Voraprapa

Abstract

Two major forces, namely rapid advancements in technology and changes in global supply chains, can independently affect how labor markets operate. Little is known about the impact of these intertwined forces in combination. This study extends Frey and Osborne's (2017) machine learning approach that explores this issue. We incorporate the features that make certain jobs difficult or impossible to perform using offshore labor markets as well as local experts' opinions to estimate domestic employment risk for each occupation. We apply our models to Thailand – a major destination for outsourced operations with ongoing technological restructuring. Our results reveal that clerical jobs face the highest risk. However, as most workers are employed in the skilled agricultural and service sectors, these occupations stand to suffer most in terms of the number of job losses. Under the assumption of no voluntary adjustments (i.e., the worst-case scenario), more than half of existing jobs could be at risk. Our approach offers a useful tool for countries facing similar structural changes to identify employment risk and develop appropriate mitigation strategies.

Suggested Citation

  • Lekfuangfu, Warn N. & Nakavachara, Voraprapa, 2021. "Reshaping Thailand's labor market: The intertwined forces of technology advancements and shifting supply chains," Economic Modelling, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:ecmode:v:102:y:2021:i:c:s0264999321001504
    DOI: 10.1016/j.econmod.2021.105561
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    More about this item

    Keywords

    Employment; Skills; Technology; Global supply chains; Thailand;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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