Measuring mismatch unemployment in the Malaysia labour market

Rusmawati Said, Salwaty Jamaludin, Normaz Wana Ismail, Norashidah Mohamed Nor and Chen Chen Yong

International Journal of Economic Policy in Emerging Economies, 2021, vol. 14, issue 3, 227-247

Abstract: Despite its low unemployment rate, the Malaysia labour market is currently sending signals of mismatch, a misallocation between demand and supply that may occur in the form of educational, skills, geographical, occupational, and industrial mismatches. Failure to identify the right type of mismatches will lead to ineffective policies to solve the unemployment issue. Using matching function, this study aims to calculate the labour mismatch index and measure the contribution of mismatch unemployment to the rise of unemployment rate. Employing various sources of data from the Department of Statistics Malaysia, Ministry of Human Resource Malaysia and Bank Negara Malaysia, this study found the presence of skills mismatch in the Malaysia labour market, with the mismatch index gradually increased from 0.108 in 2007 to 0.273 in 2017. Mismatch unemployment explained at most half of the total observed increase in unemployment rate, signalling severe mismatch in the Malaysia labour market.

Keywords: mismatch; unemployment; vacancies; matching models; Malaysia. (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=114955 (text/html)
Access to full text is restricted to subscribers.

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: https://EconPapers.repec.org/RePEc:ids:ijepee:v:14:y:2021:i:3:p:227-247

Access Statistics for this article

More articles in International Journal of Economic Policy in Emerging Economies from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().