Abstract
Economic transformation is vital for a country. In addition to helping to boost the economy, economic restructuring also affects market workers especially in terms of unemployment. However, the unemployment rate in Malaysia at an average of 3 per cent annually reflects that the restructuring has not to affect labour. Therefore, this study aims to study the pattern of job flow due to economic transformation undertaken by the Malaysian government in 2010. Descriptive analysis shows that there exists job reallocation in the Malaysian manufacturing sector from 2005 to 2015, and it was dominated by the pattern of job creation rather than job destruction, for the whole manufacturing sector or at the technological level. Based on the results of this study, this paper proposes the Malaysian government and policymakers to consider other methods, as well as the unemployment rate to analyse the labour market performance. This study proposes the use of job flow method as one of the labour market indicators in the economy.
Highlights
Economic transformation is vital for a country
Several industries in Malaysian manufacturing sector such as industries of electric and electronic, aerospace and chemical and petroleum has been acknowledged in the Economic Transformation Program (ETP), as the key-driven industries to increase the production of the manufacturing sector, directly contribute to the Gross Domestic Product (GDP) growth
Job reallocation shows an upward pattern, where it is dominated by the pattern of job creation rather than the pattern of job destruction
Summary
Economic transformation is vital for a country. In addition to helping to boost the economy, economic restructuring affects market workers especially in terms of unemployment. Malaysian Economic Transformation Program in Manufacturing Sector and Labour Market Economic Transformation Programme (ETP) is one of the significant Malaysian economic structural programs. It has been shaped in the context of twofold strategies, namely to spur Malaysian economic development and to create a competitive economic landscape. One of the contributions of structural change in the Malaysian manufacturing sector to the Malaysian labour market is the job flow, in which job flow comprises of creation, destruction and reallocation of the jobs (Faggio & Konings, 1999, 2003). While, when the restructuring process approaching the ending phase, job creation exceeds the job destruction, resulting in job reallocation occurring inter-industry in the respective sector
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