Public Sector Employment and Provincial Economies in Thailand

Abstract

This paper is set for three modest objectives: first, to investigate the provincial distribution of government officials using data compiled by the Office of Civil Services; secondly, to perform a causality test between Gross Provincial Product (GPP) and government employment, including estimations of government employment elasticities with respect to GPP; and third, to analyze the economies of scale in government employment. A provincial panel of 77 units over a 12-year period during 2009-2020 (BE 2552-2563) and three different categories of government, namely, central, judiciary and local, excluding temporary employees and military officials, were presented in this research. The results show that over the 12-year period, the government's manpower has a slight increase in manpower at  of 0.41 percent annual growth rate. This may be explained by factors such as: employment restriction policy, the use of technology to replace manpower, employment of non-essential tasks through outsourcing, or budget constraints. Comparative statistics are performed with a highlight on:, local government manpower with  high growth rate at 2.84 percent, specifically, up from 185,864 person  in 2009 to 252,877 person  in 2020. This is in accordance with Thailand’s decentralization policy that led to transfer of   responsibilities for area-based performance. Of note is that  (i) the proportion of local employment is still very small, only  20 percent of total employment of central government; (ii)  regional distribution of government manpower  is unequal, in which  the Northeastern region has  lowest rate of manpower relative to population; iii) according to causality analysis indicates that GPP is  a  cause of an increase in public manpower government employment, and not vice versa.   Another note worth mentioning is that  economies of scale in government employment is confirmed,. This implies that in the low populated provinces may be suboptimal from  viewpoint of employment efficiency