Unemployment in Malaysia

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Table of Contents Page
Introduction.............................................................................................................. 2 Type of unemployment............................................................................................. 4 * Frictional Unemployment

* Structural Unemployment
* Cyclical Unemployment
* Seasonal Unemployment
Factors of unemployment......................................................................................... 6 * Business cycle
* Aggregate demand
* Decrease in aggregate supply
Effect of unemployment........................................................................................... 7 * Economy
* Social
Solution and recommendation………………………………………………………… 9 * Fiscal Policy
* Monetary policy
* The relocation of labor policy
* Allows flexible wages and prices
* Retraining workers policy
Conclusion..................................................................................................................11 References..................................................................................................................12

Introduction
There are limited historical records on unemployment because it has not always been acknowledged or measured systematically. According to the Department of Statistics Malaysia on 30 November 2010 report that the current rate unemployment in Malaysia is 3.1 percent. The total labor force in September 2010 was 11,561.4. From that, 11,197.2 people are working and the number of unemployed persons was 364.2, or 3.2 percent. From 1998 until 2010, Malaysia’s unemployment rate averaged 3.4 percent reaching an historical high of 4.5 percent in March of 1999 and a record low of 2.9 percent March 1998. The employed defined as; any persons 16 years old or older, (1) who works for pay, either for someone else or in his or her own business for 1 or more hours per week, (2) who work without pay for 15 or more hours per week in a family enterprise, or (3) who has a job but has been temporarily absent with or without pay. Meanwhile, the unemployed are classified into two that is the actively unemployed and inactively unemployed. The actively unemployed include all persons who did not work during the reference week but were available for work and actively looking for work during the reference week. Inactively unemployed persons include the following categories: (a) Did not look for work because they believed no work was available or they were not qualified; (b) Would have looked for work if they had not been temporarily ill or had it not been for bad weather; (c) Waiting for answers to job applications; and (d) Looked for work prior to the reference week. The unemployed defined as, a person 16 years old or older who is not working, is available for work, willing to work, agree to accept the level of salaries, have the qualification to work, and has made specific efforts to find work during the previous 4 weeks. A person not looking for work because he or she does not want a job or has given up looking is classified as not in the labor force. People not in the labor force include full-time students, retirees, individuals in institutions, and those staying home to take care of children or elderly parents. The labor force is defined as the number of people employed plus the number unemployed but seeking work.

* Measurement of unemployment
The unemployment rate is the ratio of the number people unemployed to the total number of people in the labor force. The unemployment rate is expressed as a percentage, and is calculated as follows:

Year| Unemployment rate (%)|
2000| 3|
2001| 3.5|
2002| 3.5|
2003| 3.6|
2004| 3.5|
2005| 3.5|
2006| 3.3|
2007| 3.2|
2008| 3.3|
2009| 3.7|
2010| 3.2|

Table above shows the number of unemployed rate...
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