UPSI Digital Repository (UDRep)

The incidence and wage effects of over and under-education among ethnic groups in Malaysia

AVAILABLE Article 56 Views
Scan QR Code to share or view item link:

Digital Assets & Download Files
Login required to access this item.
General Information
Title
The incidence and wage effects of over and under-education among ethnic groups in Malaysia
Type
Article
Main Author
Zainizam Zakariya
Additional Authors
  • Norimah bt. Rambeli@Ramli
  • Norhanie Mahjom
  • Noor Fazlin Mohamed Noor
Subject
HD Industries. Land use. Labor
ISSN
2232-0032 / eISSN 0128-0481
Language Code
eng
Bibliographic Details
Place of Production
Tanjong Malim
Publisher
Fakulti Pengurusan dan Ekonomi
Year of publication
2015
Notes
Vol. 5 (2015): Journal of Contemporary Issues and Thought (JCIT)
Degree Type
Others
Corporate Name
Perpustakaan Tuanku Bainun

Abstract

This paper extends the study of over-education in Malaysia by looking at the incidence and wage effects of over- and under-education across ethnic groups. Using the second Malaysia Productivity Investment Climate Survey (PICS-2), around 18% and 28% of workers employed in jobs for which they are overeducated and undereducated, respectively. By ethnic group, around 19% of Malays were overeducated with the corresponding figure of 15% each for the Chinese and The Indians. By contrast, around one-third of Chinese and Indian were undereducated as compared to 26% for the Malay. With respect to earnings outcomes, Ordinary Least Square (OLS) models showed that being over educated resulted in a greater earnings loss, around 9 to 11% irrespective of gender. However, being undereducated increases the individuals_ wage premium by around 9 to 12%. Close examination by ethnic groups revealed that the penalty is greater for the Indians (15%) and followed up by the Malays (10%) and Chinese (5%).Nevertheless, the wage premium for being undereducated was higher for the Malays compared to the other two groups. These results imply that there are significant costs to work in an occupation unrelated to the major due to human capital acquired is not completely general and cannot simply be transferred to other occupations. Keyword Over-education, under-education, wage penalty, wage premium, ethnic group, Malaysia

References

Alpin, C., Shackleton, J. R., & Walsh, S. (1998). Over-and under education in the UK

graduate labour market. Studies in Higher Education, 23(1), 17-34.

 

Battu, H., & Sloane, P. J. (2002). To what extent are ethnic minorities in Britain overeducated?

International Journal of Manpower, 23(3), 192-208.

 

Battu, H., & Sloane, P. J. (2004). Over‐education and ethnic minorities in Britain. The

Manchester School, 72(4), 535-559.

 

Blau, D. M. (1985). The effects of economic development on life cycle wage rates and

labor supply behavior in Malaysia. Journal of Development Economics, 19(1-2), 163-

185. doi: DOI: 10.1016/0304-3878(85)90044-6

 

Chiswick, B. R., & Miller, P. W. (2011). Educational mismatch: Are high-skilled

immigrants really working in high-skilled jobs, and what price do they pay if

they are not? BR Chiswick, High-Skilled Immigration in a Globalized Labor Market,

Washington DC: American Enterprise Institute, 111-154.

 

Chung, T.P. (2003). Returns to education: Updates for Malaysia. Applied Economics

Letters, 10(13), 837-841.

 

Chung, T.-P. (2004). The returns to education and training: Evidence from the Malaysian

Family Life Surveys. Pacific Economic Review, 9, 103–116.

 

Gallup, J.L. (1997). Ethnicity and Earnings in Malaysia. HIID Development Discussion

Paper No. 593, 1997.

 

Heath, A. & Cheung, S.Y. (2006). Ethnic Penalties in the labour market: Employers and

discrimination. DWP Research Report Number 341, London: CDS.

 

Leuven, E., and Oosterbeek, H. (2011). Overeducation and mismatch in the labor market.

Discussion Paper No. 5523. Bonn, Germany: IZA.

 

Lim, H. E. (2013). Overeducation and happiness in the Malaysian graduate labour

market. International Journal of Business & Society, 14(1).

 

Lim, H. E., Rich, J., and Harris, M. N. (2008). Employment outcomes of graduates: The

case of Universiti Utara Malaysia. Asian Economic Journal, 22(3), 321-341.

 

Lindley, J. (2009). The over-education of UK immigrants and minority ethnic groups:

Evidence from the Labour Force Survey. Economics of Education Review, 28(1), 80-

89.

 

Department of Statistic. (2012). Perangkaan statistik buruh graduan 2011. Kuala Lumpur.

 

Department of Statistik. (2012). Household income and expenditure survey (HIS) 2012.

Kuala Lumpur.

 

Mazumdar, D and World Bank. (1981). The urban labor market and income distribution: A

study of Malaysia. New York: Published for the World Bank [by] Oxford University

Press.

 

McGuinness, S. (2006). Overeducation in the labour market.Journal of Economic Surveys,

20(3), 387-418.

 

Mehta, A., Felipe, J., Quising, P., and Camingue, S. (2011). Overeducation in developing

economies: How can we test for it, and what does it mean? Economics of Education

Review, 30(6), 1334–1347.

 

Milanovic, B. (2006). Inequality and determinants of earnings in Malaysia, 1984-1997.

Asian Economic Journal, 20(2), 191-216.

 

Mincer, J. A. (1974). Schooling, experience, and earnings. National Bureau of Economic

Research (NBER). New York: Columbia University Press.

 

Ministry of Higher Education. (2010). National Higher Education Action Plan, 2007-2010.

Kuala Lumpur.

 

Nielsen, C. P. (2007). Immigrant overeducation: evidence from Denmark.

 

Osman, Z., Yussof, I., & Nor, A. H. S. M. (2010). Inflasi pendidikan mengikut ketentuan

dalam pasaran buruh Malaysia. Jurnal Ekonomi Malaysia, 44.

 

Rafferty, A., & Dale, A. (2008). Ethnic Differences in graduate over-education in the

UK. CSSR Working paper, 5.

 

Riach, P. A. and Rich, J. (2002). Field experiments of discrimination in the market place.

The Economic Journal, vol. 112, 480-518.

 

World Bank. (2009). Malaysia productivity and investment climate assessment update. No.

49137-MY. Washington, DC: The World Bank.

 

Zakariya, Zainizam. (2013). Returns to education: What does over-education play?.

Prosiding PERKEM VIII, Jilid 1 (2013) 266 – 278. ISSN: 2231-962X.

 

Zakariya, Z., &Battu, H. (2013). The effects of overeducation on multiple job satisfaction

towards enhancing individuals ‘well-being in Malaysia. Business Management

Quarterly Review, 4(3 & 4), 36-51.

 


Installed and configured by Bahagian Automasi, Perpustakaan Tuanku Bainun, Universiti Pendidikan Sultan Idris
If you have enquiries, kindly contact us at pustakasys@upsi.edu.my or 016-3630263. Office hours only.