Accounting for total factor productivity growth of the Thai economy

We investigate the sources of Thai economic growth over the period 1972:1-2000:4 using both growth accounting and level accounting approaches, allowing explicitly for the contribution of human capital accumulation. The accumulation of human capital in Thailand is measured by the average years of schooling in population age 25-64, and we assess its relative contribution alongside physical capital accumulation and labour force growth. The rate of growth of human capital increased significantly in the period 1972:1-2000:4. We find that, after incorporating human capital, the Solow growth residual is positive and significant during the pre crisis period 1972-1996. Disaggregating our analysis over five year periods reveals a productivity slowdown with negative contribution from capital, labour, and human capital during the period 1997-2000. We conclude that both productivity growth and factor accumulation are significant in accounting for Thai growth performance during the pre and post crisis period.