Chart of the Week: Malaysia Needs More Women in the Workforce

IMF Blog, April 2, 2018

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Between 2010 and 2016, women’s employment in Malaysia grew at a compound annual rate of 4½ percent; male employment grew at a compound annual rate of 2 percent.
Malaysia’s labor force participation rate for women remains just above 54 percent.
Men’s participation rate is about 80 percent.
The contribution of female employment to Malaysia’s economic growth increased from 4 percent (from 2001 to 2008, of real GDP growth) to 14 percent (from 2011 to 2016).
The contribution of male workers increased from about 7 percent of GDP to about 13 percent of GDP.
If the female labor force participation rate had not changed since 2012, real GDP would have been about 1 percent lower in 2016 compared with what it was that year.

Sectoral growth: Health and hospitality services, and the public sector saw the highest rate of increase in female employment.
Education: Enrollment rates in high school and university education are now higher for women than for men, contributing to a higher share of skilled occupations among women.
Disparities: Labor force participation rates are particularly lower for less educated women. Incidence of unemployment is higher for women living in rural areas, aged below 29 years, or primary school educated.
Education quality: Public spending on education, as a share of GDP, is much higher in Malaysia than in peer countries, but the country needs to improve the quality of education.
Time use and family responsibilities: Most women report housework or family responsibility as the dominant reason for being outside the labor force.

The government’s 11th Malaysia Plan prioritizes improving the female labor participation rate by 5 percentage points to 59 percent by 2020.
Malaysia Education Blueprint Plan aims to improve the quality of education and build skills that are viable in the global market.

Policies included in the government’s 2018 budget that have the potential to improve women’s labor force participation:
- Increasing the duration of maternity leave for the private sector to 90 days to match that of the public sector;
- Setting a minimum of 30 percent participation of women in boards of government-linked companies and investment companies by end-2018;
- Implementing personal income tax exemptions on a maximum of 12-months consecutive salary for women, with a career break of at least two years for those who intend to return to the workforce between 2018 and 2020.
Other recommended policies:
- Increasing access to childcare facilities;
- Implementing family–friendly labor laws.

Source: Chart of the Week: Malaysia Needs More Women in the Workforce — The Editors, April 2, 2018.

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