Effect Unemployment

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International Journal of Business and Social Science

Vol. 2 No. 16; September 2011

GRADUATES’ CHARACTERISTICS AND UNEMPLOYMENT: A STUDY AMONG MALAYSIAN GRADUATES Associate Professor Dr. Noor Azina Ismail Department of Applied Statistics Faculty of Economics and Administration University of Malaya 50603 Kuala Lumpur, Malaysia E-mail: nazina@um.edu.my, Phone: +603 79673638 Abstract The main objective of this paper is to investigate the effects of graduates’ characteristics on the chance of being employed. A total of 3,025 Malaysian graduates involved in the study and data were analyzed using logistic regression analysis. The results show that the employment prospects of graduates with a good command of English and who possess leadership and technical skills are better when compared to those without these skills. These findings suggest that steps should be taken to improve soft skills among graduates. The results also show that Indian and female graduates in this study were found to have less chance of being employed compared to the Malay and Chinese graduates. However, these findings should be interpreted with caution as some of the respondents were not randomly selected, thus suggesting further research towards identifying the relevant factors is required.

Keywords: Unemployment, graduates, logistic regression, mismatch, leadership and technical skills, education 1. INTRODUCTION

Malaysia‟s economy had been growing at an annual rate of 6.6% for the past three decades; yet unemployment rates have increased from 2.6% in 1996 to 3.6% in 2003 (Department of Statistics, Malaysia, 1996–2003). Young graduates, in particular, experience difficulties in securing their first job and a high proportion of graduates hold a job that does not correspond to their education and expectations. In the last 20 years, the expansion of higher education has created a high number of graduates in a variety of disciplines. The expansion includes a number of public as well as private institutions. Public universities have grown from seven public universities in the 1990s to a total of 20 in 2007 (Ministry of Higher Education, 2007). A total of 18 private universities have also been established during the same period. At the same time, there are more than 500 other institutions, including university colleges, branch campuses of local and overseas institutions, open universities and other institutions with non-university status. Student enrolment had sky-rocketed. In 2002, the total number of students enrolled in higher institutions was 576,439 and enrolment had increased to 748,797 in 2007. With the expansion of higher education, greater attention has to be paid to the labor market prospects since imbalances may be created between higher education and labor market demands (Kartz-Gerro & Yaish, 2003; Teichler, 2000). Specifically, there have been concerns about the level of graduate unemployment, the transition from higher education to work and the problems of job mismatches (Kougioumoutzaki & Kalamatianou, 2008). Although the unemployment rate in Malaysia is always low compared to the United States or European countries, there are great concerns for unemployment. This is due to the fact that currently, there is no unemployment insurance or assistance available in the country. Hence an increase in the unemployment rate may lead to an increased crime rate. In light of the above, this paper focuses on issues concerning unemployment and the association between graduates‟ characteristics and the chance of being employed in Malaysia, given the economic situation, changes in economic structure and changes in education growth. 2. UNEMPLOYMENT: ISSUES IN MALAYSIA According to the definition of the Malaysia Labor Force Survey, the unemployed include persons who were available for work but did not work during a reference period. They could either be actively looking for work or not during the said period. The Malaysian economy did experience a...
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