External Influences and Labour Market Differentials in Manufacturing: Evidence from Malaysian Panel Data

Evelyn Devadason
Additional contact information
Evelyn Devadason: Department of Economics, Faculty of Economics & Administration, University of Malaya, Kuala Lumpur, Malaysia

Indian Economic Review, 2007, vol. 42, issue 1, pages 1-18

Abstract: There are two stylized facts regarding labour market differentials in the Malaysian manufacturing sector - diverging trends in skill and wage differentials and asymmetric experience of these differentials between the 1980s and 1990s. These trends coincided with increased trade flows, foreign direct investment and the influx of foreign migrant labour. The paper seeks to examine the impact of external influences on labour market differentials for the period 1983 to 2000, using relative employment and wage equations derived from a standard translog cost function. The estimations are conducted for a new panel data set, specially constructed for the study. The results show that foreign participation in the form of foreign direct investment does not matter for the observed differentials. However, the other two international strands, foreign labour and foreign competition in the form of imports, have significantly influenced labour market differentials. In conclusion, external factors are relatively more important for labour market differentials in manufacturing in the 1990s vis-à-vis the 1980s.

Keywords: Skill Differential; Wage Differential; Trade; Foreign Direct Investment; Foreign Labour (search for similar items in EconPapers)
JEL-codes: J23 F16 (search for similar items in EconPapers)
Date: 2007

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:dse:indecr:v:42:y:2007:i:1:p:1-18

Ordering information: This journal article can be ordered from
http://www.ierdse.org/

Access Statistics for this article

Indian Economic Review is edited by Pami Dua and Sunil Kanwar

More articles in Indian Economic Review from Department of Economics, Delhi School of Economics
Address: Delhi 110 007
Contact information at EDIRC.
Series data maintained by Pami Dua ().