An Analysis of Factors Affecting Malaysia’s Youth Unemployment Rate

Abstract

This study aims to identify if macroeconomics-related indicators consisting of gross domestic product (GDP), inflation, population and economic shocks are related in the Malaysia’s youth unemployment. The youth unemployment rate and its determinants’ data from an extended period of 1982 to 2020 were obtained from the Department of Statistics Malaysia (DOSM). By employing the autoregressive distributed lag (ARDL) analysis, findings show that Gross Domestic Product and Population significantly affect Youth Unemployment in the long-run. These findings indicate that the Malaysian government should develop youth-specific strategies to combat youth unemployment, with Technical and Vocational Education Training (TVET) quality and availability being one of the key initiatives. Emergency income support for youth starting in the job market ought to be provided as well, to assist them during economic shocks. Future research that includes foreign direct investment and gender variables together with youth unemployment data utilised in the current study is recommended.