Foreign Workers In Malaysia

Topics: Labor, Economics, Human resources Pages: 45 (2823 words) Published: May 9, 2015
Foreign Workers in Malaysia:
Assessment of their Economic Effects and Review of the Policy The World Bank
International Population Conference on Migration, Urbanization and Development

July 8th, 2013
The World Bank, East Asia Pacific Region,
Human Development Dept. Social Protection & Labor Unit

Objective

This study aims to help MOHR to better…
Manage existing human resources in the
country.
• Plan for the development of future human
capital needs.


Two Interlinked Components

I. Human Resource Management
1.
2.
3.

4.
5.

Identify skills mismatches/gaps, and suboptimal amount of training. Evaluate three key policies in the skills domain: soft skills and English language. Assess skill forming policies, benchmarking and learning from international practices.

Future human resource requirements: Micro-simulation results. Way forward to better manage human resources.
II. Immigration Management

1.
2.
3.
4.

3

Characterize labor migration in Malaysia over time, sectors and states. Identify economic and social impact of foreign workers in the economy. Assess current policy compared to international systems.

Way forward to better manage immigration.
The World Bank, East Asia Pacific Region,
Human Development Dept. Social Protection & Labor Unit

Road map

1.

What are the potential concerns over the employment of foreign workers?

2.

Foreign workers and Malaysia:

3.

4.

5.



Determinants of employment of foreign workers in Malaysia



Profile of foreign workers in Malaysia

Economic Impact of Foreign Workers on:


Labor markets



Firm-sub-sector productivity

Potential effects of policy changes:


Macroeconomic Impacts



Sub-sector growth and employment

Foreign Workers Management:


6.

Conclusion:


4

Current Policies and comparable Systems

Key Messages
The World Bank, East Asia Pacific Region,
Human Development Dept. Social Protection & Labor Unit

FOREIGN WORKERS AND MALAYSIA
MAIN DETERMINANTS

The World Bank, East Asia Pacific Region,
Human Development Dept. Social Protection & Labor Unit

Education levels in Malaysia improved drastically over the last 20 years One of the most remarkable features
of the Malaysian experience has been
the advances achieved in education
levels of the labor force over a very
short period.

Education distribution of Malaysian
workers
100%

80%

60%

The share of Malaysians with (at most)
primary school education declined
from 61% in 1990 to 26% in 2010

40%

20%

The share of secondary educated (at
most) increased from 34% to 56%.
The share of college educated
increased from 5% to 18% in the same
period.

0%

Not applicable
Upper Secondary
Degree

No formal/Primary
Post secondary

Note: The analysis is focuses on the working age population (15 to 64 years of age) 6

Lower Secondary
Diploma/Certificate

Labor Market conditions have been quite tight
Unemployment rates have always been quite low. This is partly due to rapid growth as well as relatively low labor force participation levels by women. The inflow of foreign workers is largely attributable to demand factors in the domestic labor market.

Labor Force Participation

14,000

Labor Market Composition

100%
12,000
80%

10,000
8,000

60%

6,000
40%
4,000
2,000

20%

7

Female natives

Total employed

Total Unemployed

2011

2010

2005

2000

1995

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1993

1992

1990

Male Natives

1990

0
0%

The economy heavily relies on export-oriented manufacturing and domestic service sectors
Agriculture
Mining
Mfg food-bev-tob
Mfg textile
Mfg wood
Mfg paper-furn
Mfg chem-rub
Metal-machinery-equ
Mfg meas-med-com
Mfg transp equip
Utilities
Construction
Wholesale-retail
Accommodation and resturant
Logistics
Post and...
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