Supply-side pay determinants in the Malaysian manufacturing sector

Abstract

This study examines the determinants of an individual worker's pay from the employee's perspective using the new disaggregated dataset obtained from the Second Malaysian Productivity Investment Climate Survey. A quantile regression analysis on the extended Mincerian pay model was used in the estimation. The findings suggest that higher education level, training and skills are the key determinants of the individual worker's pay. Interestingly, training from current employer has a bigger impact on pay than training from a previous employer or off-the-job training. Additionally, advanced computer skill has a more positive impact on pay compared with having medium, basic or no computer skill. Moreover, workers in professional employment and management are also paid significantly higher salaries than those in other types of jobs.