This paper examines the social impact of the recent Asian Economic crisis, drawing
on the results of studies in two countries: Singapore and Thailand. The economic
crisis had interrupted three decades of steady growth that had been accompanied by
remarkable progress in poverty reduction and a betterment of social indicators like
health and education. In particular, this crisis is feared to have a large negative effect
on household welfare. It is found that absolute poverty became more acute in
Thailand and with the wake of unemployment and decrease in real wages, income
inequality increased both in Singapore and Thailand. This paper has examined the
effect of crisis on other social indicators, such as school enrolments, dropouts and
health. It is observed that the crisis has exposed significant limitations in the ability
of social safety nets to cope with a negative shock of this magnitude, and manifested
the need for better targeting to help households tide over their difficulties.