Thai labour market faces skills mismatch as four job groups risk AI disruption

Thailand’s labour market is facing growing pressure from demographic change, education mismatch and the rise of artificial intelligence, with four major occupational groups at risk of disruption.

Thailand’s changing population structure — longer lifespans, fewer births and an ageing society — is reshaping the country’s health, social and economic landscape. The challenges are not confined to any single age group, but are linked across the entire life course.

According to the “Thai Health 2026” report, prepared by the Institute for Population and Social Research at Mahidol University and the Thai Health Promotion Foundation, Thailand’s overall physical health situation reflects a pattern of “living longer but being ill for longer”.

Between 2009 and 2024, life expectancy at birth rose to 75.6 years. However, health-adjusted life expectancy stood at 68.7 years, meaning people live with illness or dependency for an average of 6.9 years. The figure is even higher among women, at 9.6 years.

Risk behaviours from adolescence have long-term consequences, contributing to chronic diseases later in life.

Maternal and child health also faces challenges, including infertility, declining pre- and postnatal care, and inappropriate child nutrition. These issues show that Thailand’s health challenges span all stages of life.

Demographic change is also increasing health vulnerability among certain groups, including poor children and young people who are increasingly dropping out of the education system.

The trend is consistent with the projected rise in dependent elderly people. Their proportion is expected to increase from 3.6% in 2024 to 4.5% in 2037, while the total number of dependent elderly people is forecast to rise from about 547,300 to around 919,100.

More elderly people working, but many go untreated

Thailand’s labour market is facing a shrinking working-age population, while the number of elderly people who are working or wish to work has risen from 3.3 million in 2017 to 5 million in 2024.

This reflects a new role for older people and a labour market that must adapt. At the same time, family responsibilities and childcare continue to limit work opportunities for some groups of women.

Thailand therefore needs a comprehensive labour plan to increase domestic labour participation, improve skills and manage migrant labour.

Population ageing is also putting pressure on Thailand’s public health system in terms of access to services, workforce capacity and financial sustainability.

Although Thailand has universal healthcare coverage, elderly people remain the group with a high proportion of those who fall ill but do not receive treatment, due partly to travel difficulties and long waiting times.

Demand for long-term care is also rising rapidly. By 2037, Thailand may need more than 212,896 home-based carers.

These are major challenges for the Thai public health system, which must build a sustainable care ecosystem to support an ageing society.

The shift towards an ageing society is also creating clear economic, fiscal and social pressure. A shrinking labour force and slow human-capital development are expected to weigh on long-term economic growth.

At the same time, the structure of social spending is changing significantly, with retirement-related expenditure rising by as much as 46.2%.

At household level, many elderly people do not have enough income to cover consumption, while intergenerational tensions are increasing amid rapid social and technological change.

Study-job mismatch and weak digital skills

Thailand’s education system is still struggling to produce workers whose skills match labour-market needs.

A key problem is horizontal mismatch, where people work in jobs unrelated to their field of study. This affects 55.8% of Thai workers, almost double the 31.7% average among member countries of the Organisation for Economic Co-operation and Development (OECD).

Vertical mismatch, where jobs do not match education levels, is also evident. Some 27.6% of Thai workers have higher qualifications than their jobs require, while 4.5% have lower qualifications than required.

This mismatch not only weakens the effective use of human capital, but also affects labour productivity, income and long-term motivation to develop new skills.

Skills data also point to quality-related constraints among Thailand’s population. Young people and working-age adults have lower-than-expected basic life skills, especially digital skills.

The report found that 74.1% of people have digital skills below the expected level. This is a major limitation on the ability of Thai workers to adapt to the digital economy, technological change and the future labour market.

With the number of elderly people working or wanting to work continuing to rise, Thailand’s changing age structure — particularly the decline in the proportion of working-age people — is having a serious impact on the country’s long-term economic growth potential.

Thailand needs comprehensive labour planning, including measures to increase domestic labour-force participation, improve the quality of younger workers and plan for the use of migrant workers to fill labour shortages.

Four job groups at risk of AI replacement

A study from OECD member countries in late 2024 found that 39.1% of small and medium-sized enterprises said AI helped compensate for workers’ lack of skills or experience. Another 25.2% said AI helped ease overall labour shortages.

Artificial intelligence is changing the world of work faster than many expected. Technology was once seen mainly as a “helper”, but AI is now beginning to replace human work in several areas, from paperwork, services and sales to factory operations.

As a result, many occupations face a growing risk of replacement.

The latest data show that the highest-risk occupations are:

• Clerical and administrative roles, with a 73% risk of being affected.
• Factory machine operators, with a 68% risk.
• Elementary occupations, with a 62% risk.
• Service and sales workers, with a 57% risk. Although this group has a slightly lower risk level, it has the largest number of workers who could be affected, at more than 3.2 million people.

These figures show that AI is not affecting only low-skilled workers. It is also beginning to affect specialist professions, managers and civil servants.

The world of work is therefore entering an era in which existing skills may no longer be enough.

However, AI does not have to be the enemy if people can adapt in time. Learning new skills such as analytical thinking, technology use, communication and creativity will be crucial to survival.

The areas AI still finds difficult to replace include human understanding, ethical judgement and relationships between people.

The future of Thai workers therefore depends not only on how capable AI becomes, but also on whether people can adapt quickly enough in a world that is changing every day.

Thailand’s changing population structure is reshaping working life for people of all ages. The country’s labour challenges are not only about workforce numbers, but also about designing work systems, labour policies and welfare schemes that support longer and more diverse working lives.

This will be essential to ensure that everyone can participate fully in the economy and reach their potential.