The effect of aggregate mismatches among tertiary educated workers on economic growth in Malaysia, 1984-2016
This study aims to investigate the incidence and the outcome of aggregate mismatchin the labour market among tertiary-educated workers on economic growth, Gross DomesticProduct (GDP) in Malaysia between 1984 - 2016. In addition, the thesis also evaluates long-termrelationships and granger causal bet...
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| Format: | thesis |
| Language: | eng |
| Published: |
2020
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| Subjects: | |
| Online Access: | https://ir.upsi.edu.my/detailsg.php?det=6994 |
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| Summary: | This study aims to investigate the incidence and the outcome of aggregate mismatchin the labour market among tertiary-educated workers on economic growth, Gross DomesticProduct (GDP) in Malaysia between 1984 - 2016. In addition, the thesis also evaluates long-termrelationships and granger causal between the aggregate mismatch and other macro variables toMalaysia's economic growth. The aggregate mismatch refers to workers own actual qualificationlevel is either higher or lower than that is required by the job. The study employed econometrictime-series analysis using Vector Error Correction Model (VECM). Apart from the GDP and theaggregate mismatch, the time-series data over 33 years consist of the other five controlledvariables, i.e.- private consumption, investment, government expenditure, net export and education.The variables were collected from various sources such as the Departments of Statistic Malaysia andthe World Bank. Four types of analysis were employed - descriptive analysis, integrationanalysis (Unit Root Test Augmented Dickey Fuller Unit, Lag Selection and Vector AutoRegressive) followed by Johansen co-integration analysis and granger causality test. Based onthe descriptive analysis, it was found that on average, 7.7 percent of thetertiary-educated workers were considered being in mismatched jobs. Subsequently, theco-integration test showed at least one direction of causation between GDP and the aggregatemismatch and other variables. The VECM revealed a long-run Granger causality ofaggregate mismatch and other variables toward GDP. In the short term, however, the Wald testonly revealed a bi- directional causality between GDP and the aggregate mismatch. Finally, thelong-run relationship equation showed a significant negative relationship between the aggregatemismatch and GDP. In conclusion, increasing in the number of mismatched workers at the aggregatelevel in the labour market would slow down the country's economic performance as it negativelyaffects the growth. It is important, therefore, for stakeholders such as governments, firmsand individuals to play roles in reducing themismatch at the macro level. |
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