Income and Employment Multiplier Effects of the Malaysian Higher Education Sector

Siew Hwa Yen, Wooi Leng Ong and Koon Peng Ooi
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Siew Hwa Yen: Siew Hwa Yen (corresponding author) is Fellow Researcher at the Malaysian National Higher Education Research Institution and Senior Lecturer at School of Distance Education (Economics Section), Universiti Sains Malaysia, 11800, Minden, Penang, Malaysia, email: shyen@usm.my
Wooi Leng Ong: Wooi Leng Ong is a graduate student at the National University of Singapore, email: wooilengong@yahoo.com
Koon Peng Ooi: Koon Peng Ooi is an undergraduate student at University of British Columbia, email: ooikoonpeng@hotmail.com

Margin: The Journal of Applied Economic Research, 2015, vol. 9, issue 1, 61-91

Abstract: The aim of this article is to examine the income and employment multiplier effects of the higher education sector in Malaysia based on conventional input–output methodology. We examined simple, total, Type I and Type II income and employment multiplier effects of private and public higher education institutions (HEIs) in Malaysia. We found that private HEIs have larger direct and indirect income impacts than public HEIs. With the presence of household spending, both public and private HEIs have greater induced income impacts than direct and indirect income generation effects. We also found that Type I multipliers for private and public HEIs lead to additional income of 1.34 and 1.32 for every initial Ringgit of labour income, respectively, while Type II income multipliers for private and public HEIs account for additional income of 3.09 and 3.05, respectively. Higher education creates 1.21 workers per RM 10,000 investment. The overall results show that private higher education has a relatively greater income effect on the economy.compared to public higher education. The higher education sector is also found to be ineffective in creating new employment in the economy. JEL Classification: I23, I25

Keywords: Input–Output Analysis; Income Multiplier; Employment Multiplier; Higher Education (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:9:y:2015:i:1:p:61-91

DOI: 10.1177/0973801014557391

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