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Inequality and Determinants of Earnings in Malaysia, 1984–1997

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  • Branko Milanovic

Abstract

Using three large nationally‐representative Malaysian Household Income Surveys from 1984, 1989 and 1997, the present paper examines inequality and determinants of earnings. During the period 1984–1997, Malaysia's real per capita GDP increased by approximately 70percent, the participation rates for both men and women went up among all age groups, and the average number of years of schooling increased by 1.2years. There was a significant relative wage improvement among the bottom deciles. The rate of return to an additional year of schooling remained high (at 10percent), despite the huge increase in the supply of the highly educated. The stable overall rate, however, masks an increased rate of return on women's education, and a decreased rate for men. Wage discrimination against women amounts to 16–20percent, and the bias has increased in 1997. The pro‐Chinese earning ethnic bias is estimated at 31percent.

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  • Branko Milanovic, 2006. "Inequality and Determinants of Earnings in Malaysia, 1984–1997," Asian Economic Journal, East Asian Economic Association, vol. 20(2), pages 191-216, June.
    • Handle: RePEc:bla:asiaec:v:20:y:2006:i:2:p:191-216
    DOI: 10.1111/j.1467-8381.2006.00230.x
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    References listed on IDEAS

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    Cited by:

    1. Ravallion, Martin, 2020. "Ethnic inequality and poverty in Malaysia since May 1969. Part 1: Inequality," World Development, Elsevier, vol. 134(C).
    2. Eric D. Ramstetter, 2014. "Wage Differentials between Foreign Multinationals and Local Plants and Worker Quality in Malaysian Manufacturing," Asian Development Review, MIT Press, vol. 31(2), pages 55-76, September.
    3. Risti Permani, 2009. "The Role of Education in Economic Growth in East Asia: a survey," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 23(1), pages 1-20, May.
    4. Muhammed Abdul Khalid & Li Yang, 2019. "Income Inequality and Ethnic Cleavages in Malaysia: Evidence from Distributional National Accounts (1984-2014)," Working Papers hal-02876992, HAL.
    5. Kim-Leng Goh & Nai-peng Tey, 2018. "Nai-peng Tey ; Faculty of Economics and Administration, University of Malaya Title : Personal income in Malaysia: distribution and differentials," Economics Bulletin, AccessEcon, vol. 38(2), pages 973-982.
    6. Khalid, Muhammed Abdul & Yang, Li, 2021. "Income inequality and ethnic cleavages in Malaysia: Evidence from distributional national accounts (1984–2014)," Journal of Asian Economics, Elsevier, vol. 72(C).
    7. Ramstetter, Eric D., 2017. "Foreign Workers, Foreign Multinationals, and Wages after Controlling for Occupation and Sex in Malaysia’s Manufacturing Plants during the mid-1990s," AGI Working Paper Series 2017-13, Asian Growth Research Institute.
    8. Mamiko Takeuchi, 2021. "Determinants of Earnings and Gender Earnings Gaps among Highly Educated Workers within Major Cities in Asian Countries," Asian Economic Journal, East Asian Economic Association, vol. 35(2), pages 166-186, June.
    9. Muhammed Abdul Khalid & Li Yang, 2019. "Income Inequality and Ethnic Cleavages in Malaysia: Evidence from Distributional National Accounts (1984-2014)," World Inequality Lab Working Papers hal-02876992, HAL.
    10. Cuberes, David & Schmillen, Achim & Teignier, Marc, 2023. "The aggregate gains of eliminating gender and ethnic gaps in the Malaysian labor market," Journal of Asian Economics, Elsevier, vol. 87(C).
    11. Devadason, Evelyn, 2007. "Do Trading Partners Matter for Labour Market Inequality? The Malaysian Case," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 3(01-2), pages 1-14.
    12. Ramstetter, Eric D., 2014. "Exporting, Education, and Wage Differentials between Foreign Multinationals and Local Plants in Indonesian and Malaysian Manufacturing," AGI Working Paper Series 2014-03, Asian Growth Research Institute.
    13. Martin Ravallion, 2019. "Ethnic Inequality and Poverty in Malaysia Since 1969," NBER Working Papers 25640, National Bureau of Economic Research, Inc.

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