Labor Force Participation of Women in Malaysia

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LABOR FORCE PARTICIPATION OF WOMEN IN MALAYSIA Nor’Aznin Abu Bakar Norehan Abdullah Faculty of Economics Universiti Utara Malaysia Abstract The article analyses the women labor force participation in Malaysia. The rapid absorption of women into the labor market has been influenced by several factors. The rapid economic growth was due largely to important growth in the manufacturing and services sectors, where substantial and proportionally larger increase of female workers has been registered. Among all sectors of the economy, the manufacturing sector has recorded the highest growth rate during the last decade. The increase in the female labor force participation may also be attributable to improving economic incentives in employment and policies favoring the employment of women. In addition, the combined effects of increased years of schooling, access to family planning services, improved maternal and child care, leading to arise in the average age at marriage, have allowed women to take advantage of the increased employment opportunities.

Keywords: women, labor force participation, probit model, government policy

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1. Introduction Human resource is one of the main contributing factors for economic growth and for social, political, and technological development. In the era of globalization, economic liberation and fast growing ICT, strengthening the national competitive advantage is the concern of the policy makers. Subsequently, various human resource development planning and strategies are formulated and action plan are outlined at various phases of development. Human resource development continued to be given priority in support the implementation of a productivity-driven growth, which required highly skilled, trainable and knowledge manpower. Emphasis continued to be given to increase accessibility to education at all levels in line with the democratization of the education policy. The high growth rate of the economy was achieved with the price stability and since 1995, with virtually full employment before the currency crisis erupted in the late 1997. The rapid expansion in manufacturing increased employment in the sector sharply during the Sixth Malaysia Plan period, and dramatically altered the employment structure. The achievement of virtual full employment in 1995 marked a new landmark in the country’s socioeconomic progress. The unemployment rate decreased from 2.8 percent in 1995 to 2.6 percent in 1996. However, the situation was different after the currency crisis occurred in 1997. 2. Labor Force Participation Rates Malaysia has a very large population of productive potential work force. In terms of age structure, in 1999, about 35 percent of the population were below the age 15, while 4 percent were in the age group 65 and above. The remaining 61 percent were in the working age group that is the age group between 15 to 64 years. In year 2000, there were 9,194 people in the labor force and employments were 8,920 people (see Economic Report 1999/2000). 55.3 per cent of the labor force was in urban areas. The labor force participation rate (LFPR), which measures the people in labor force as a percentage of the non institutionalized population, increased from 65.3 per cent in 2001 to 65.5 percent in 2002, attributed mainly by school leavers in 2024 years age group. Male LFPR increased marginally from 85.3 per cent in 1995 to 85.4 percent in 2000, while female LFPR increased from 43.5 per cent to 44.5 per cent. (see the Labor Force Survey by Department of Statistics) Employment by Sector During 1991-1995 periods, the employment rate expanded at an impressive rate of 3.4 per cent. A total of 1.2 million jobs were created during the period where the manufacturing sector was the highest contributor to the total employment, accounting for about one quarter of total employment and almost 60 per cent of net employment creation (Table 1).

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Table 1: Employment by sector, 1990-2005 (‘000 persons)
Sector...
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