Thai demand for higher education cooling as population ages

Thailand has been an attractive international education market for some time and continues to send substantial numbers of students for studies abroad, primarily to Australia, the US, and the UK. Numbers have declined for some destinations, notably the US, but others, such as Australia and New Zealand, have seen steady gains over the past five years. Even so, it seems clear that overall growth rates in terms of outbound mobility are modest. UNESCO data indicates that the total number of outbound tertiary students has largely hovered around 25,000 per year for much of the past decade. For some destinations, Australia again being a notable example, Thai enrolment in English Language Teaching (ELT) programmes adds a significant increment to this tertiary base. But education and demographic trends in Thailand suggest that overall growth rates in outbound mobility will remain modest for the foreseeable future. Thailand is often associated with its ASEAN neighbours for its notable economic growth and burgeoning middle class. There are, however, a couple of important distinctions when it comes to demand for education. First, the Thai higher education system has expanded considerably through the 1990s and beyond, and there are some important indicators that supply now exceeds domestic demand, particularly in some programme areas. There are 170 universities in Thailand today, which together offer around 4,100 academic programmes. In a rather stark indication of the emerging supply-demand gap, however, just over 105,000 Thai students sat university entrance exams in 2015 – in a system that can admit more than 156,000 new students per year. That tens of thousands of university seats will go unused as a result is not lost on institutional leaders who are now considering their options, including gradually shrinking, or even closing outright, undersubscribed programmes. “The numbers are a wake-up call for university administrators to start thinking of changes in the number of students in each department,” says a recent item in the Bangkok Post. The macro numbers bear this out as well in that, after a period of significant expansion over the previous two or three decades, total tertiary enrolment in Thailand peaked in 2007 and has been essentially flat since (with modest year-over-year declines for most of the last decade). Demographic trends are playing an important role here, and in this respect Thailand also sets itself apart from its regional neighbours. In most Southeast Asian countries, growing working age populations are helping to drive GDP growth and improved productivity. Not so in Thailand where the National Economic and Social Development Board projects that school-aged Thais (those 21 years and younger) will fall to 20% of the population by 2040, a dramatic decline from the roughly 62% of the population that they represented in 1980. The issue has been, and is, the country’s low birth rate. Owing in part to earlier national policies that sought to reduce fertility rates, the population growth rate in Thailand has fallen from from around 3% in the 1960s and 1970s to .3% today. Annual population growth rates for Thailand, 1960-present. Source: United Nations "It’s all in the numbers,” says a recent report from Credit Suisse. “While Indonesia, Malaysia, the Philippines, Singapore and Vietnam all have population growth rates of at least 1% per year between 2010 and 2015, Thailand’s is only 0.3%. Its total fertility rate of 1.4 children per woman is significantly lower than the Philippines (3.1), Indonesia (2.3) and Malaysia (2.0). Thailand’s labour force growth rate is also the lowest of the six countries, coming in at 0.8% per year compared with 2.4% for the Philippines…Those less-than-desirable demographic trends are hurting the economy. The combination of labour shortages, low investment rates and the scarcity of high-level skills have already become binding constraints on long-term growth rates. As a result, Thailand’s potential GDP growth rate could fall to around 3.5% over the next decade from the range of 4 to 4.5% that has been seen in the past." In short, the Thai population is ageing, and it is doing so quickly. “Thailand ranks as the world's third most rapidly ageing population,” observes a recent opinion piece in the Bangkok Post. And analysts project that the country will have one of the world’s fastest-declining populations of 18-to-22-year-olds over the next decade. Drawing in part on UN Population Division data, the British Council expects the college-aged population in Thailand to shrink by about 20% (or roughly 750 million people) between 2012 and 2025. Even with these overarching trends, we might expect stability, if not growth, in outbound numbers through 2025. Supply-demand gaps notwithstanding, the Thai higher education system is in need of reform to address changing labour market requirements and quality concerns. This process has been delayed by political instability in Thailand in recent years, another factor that has spurred interest in study abroad of late. For additional background, including important insights from frontline practitioners, please see “From the field: Recruiting in Thailand.”