Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist?
Malaysia is on the track of becoming a developed country towards 2020. However, to achieve such target is not easy. Malaysia is expecting to reach the unemployment rate of 2.8% in the year 2020. Hence, the objective of this study is to examine determinants of unemployment rate in Malaysia from the y...
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| Format: | Proceedings |
| Language: | English English |
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Universiti Malaysia Sabah
2021
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| Online Access: | https://eprints.ums.edu.my/id/eprint/31476/1/Unemployment%20rate%20in%20Malaysia%2C%20Does%20Okun%E2%80%99s%20Law%20%26%20Philips%20curve%20exist-ABSTRACT.pdf https://eprints.ums.edu.my/id/eprint/31476/2/Unemployment%20Rate%20in%20Malaysia%2C%20Does%20Okun%E2%80%99s%20Law%20%26%20Philips%20Curve%20Exist.pdf |
| _version_ | 1825714521260425216 |
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| author | Cherylad Jikunan Siti Hajar Samsu Beatrice Lim Fui Yee |
| author_facet | Cherylad Jikunan Siti Hajar Samsu Beatrice Lim Fui Yee |
| author_sort | Cherylad Jikunan |
| collection | UMS |
| description | Malaysia is on the track of becoming a developed country towards 2020. However, to achieve such target is not easy. Malaysia is expecting to reach the unemployment rate of 2.8% in the year 2020. Hence, the objective of this study is to examine determinants of unemployment rate in Malaysia from the year 1982 to 2017. Secondary data is used and collected from the World Bank’s official website and the Department of Statistics Malaysia. The study employed the Johansen Cointegration test and Vector Error Correction Model (VECM) to identify the long and short-run relationship. Granger Causality test is used to find the causation between the unemployment rate and the variables studied. The result found all variables are cointegrated in long run and short run. Besides, all the variables have no causality with each other except for the LSEC variable (secondary education level). Inflation rate and GDP growth is found to be positively significant to unemployment rate. Thus, Okun’s Law and Philips Curve do not exist in Malaysia case. The inflation rate has been identified as the main determinants of the unemployment rate in Malaysia. The positive relationship it has with unemployment rate indicates in Malaysia case it is known as stagflation situation. Malaysia must formulate the economic policy that enable to lower inflation without exacerbate unemployment rate. In addition, policy makers should take a necessary action towards the issue of job mismatch and job vacancy in the labour market that may lead to exacerbate unemployment rate in Malaysia. |
| first_indexed | 2024-03-06T03:13:02Z |
| format | Proceedings |
| id | ums.eprints-31476 |
| institution | Universiti Malaysia Sabah |
| language | English English |
| last_indexed | 2024-03-06T03:13:02Z |
| publishDate | 2021 |
| publisher | Universiti Malaysia Sabah |
| record_format | dspace |
| spelling | ums.eprints-314762021-12-22T01:15:29Z https://eprints.ums.edu.my/id/eprint/31476/ Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist? Cherylad Jikunan Siti Hajar Samsu Beatrice Lim Fui Yee HD5701-6000.9 Labor market. Labor supply. Labor demand Including unemployment, manpower policy, occupational training, employment agencies Malaysia is on the track of becoming a developed country towards 2020. However, to achieve such target is not easy. Malaysia is expecting to reach the unemployment rate of 2.8% in the year 2020. Hence, the objective of this study is to examine determinants of unemployment rate in Malaysia from the year 1982 to 2017. Secondary data is used and collected from the World Bank’s official website and the Department of Statistics Malaysia. The study employed the Johansen Cointegration test and Vector Error Correction Model (VECM) to identify the long and short-run relationship. Granger Causality test is used to find the causation between the unemployment rate and the variables studied. The result found all variables are cointegrated in long run and short run. Besides, all the variables have no causality with each other except for the LSEC variable (secondary education level). Inflation rate and GDP growth is found to be positively significant to unemployment rate. Thus, Okun’s Law and Philips Curve do not exist in Malaysia case. The inflation rate has been identified as the main determinants of the unemployment rate in Malaysia. The positive relationship it has with unemployment rate indicates in Malaysia case it is known as stagflation situation. Malaysia must formulate the economic policy that enable to lower inflation without exacerbate unemployment rate. In addition, policy makers should take a necessary action towards the issue of job mismatch and job vacancy in the labour market that may lead to exacerbate unemployment rate in Malaysia. Universiti Malaysia Sabah 2021 Proceedings PeerReviewed text en https://eprints.ums.edu.my/id/eprint/31476/1/Unemployment%20rate%20in%20Malaysia%2C%20Does%20Okun%E2%80%99s%20Law%20%26%20Philips%20curve%20exist-ABSTRACT.pdf text en https://eprints.ums.edu.my/id/eprint/31476/2/Unemployment%20Rate%20in%20Malaysia%2C%20Does%20Okun%E2%80%99s%20Law%20%26%20Philips%20Curve%20Exist.pdf Cherylad Jikunan and Siti Hajar Samsu and Beatrice Lim Fui Yee (2021) Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist? https://drive.google.com/file/d/1fEDZliMTjTzkjDwn3BF86-eXNMa8Gnc5/view?usp=sharing |
| spellingShingle | HD5701-6000.9 Labor market. Labor supply. Labor demand Including unemployment, manpower policy, occupational training, employment agencies Cherylad Jikunan Siti Hajar Samsu Beatrice Lim Fui Yee Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist? |
| title | Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist? |
| title_full | Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist? |
| title_fullStr | Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist? |
| title_full_unstemmed | Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist? |
| title_short | Unemployment rate in Malaysia: Does Okun’s Law & Philips curve exist? |
| title_sort | unemployment rate in malaysia does okun s law philips curve exist |
| topic | HD5701-6000.9 Labor market. Labor supply. Labor demand Including unemployment, manpower policy, occupational training, employment agencies |
| url | https://eprints.ums.edu.my/id/eprint/31476/1/Unemployment%20rate%20in%20Malaysia%2C%20Does%20Okun%E2%80%99s%20Law%20%26%20Philips%20curve%20exist-ABSTRACT.pdf https://eprints.ums.edu.my/id/eprint/31476/2/Unemployment%20Rate%20in%20Malaysia%2C%20Does%20Okun%E2%80%99s%20Law%20%26%20Philips%20Curve%20Exist.pdf |
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