Employment in Malaysia

On a year-on-year comparison, employed persons grew by 3.2% (493,900), up from 15.21mn persons in the previous quarter.

According to the Department of Statistics, Malaysia's labour market was on a positive trajectory in the second quarter of 2022, following the gradual normalisation of economic activities in line with the country's transition to its endemic phase and re-opening of borders.

The labour force remained on its positive trend for two consecutive quarters, and rose by 0.6% – or 97,100 persons – to record 16.34mn persons in Q2 2022 For comparison, Q1 of 2022 noted 16.25mn persons.

Subsequently, the labour force participation rate (LFPR) increased by 0.2 percentage points (pp) to mark 69.2% from the previous quarter. With this growth, the LFPR in this quarter was the highest rate noted, even exceeding the pre-pandemic rate of 69.1% in Q4 2019.

The employment-to-population ratio, which indicates the ability of an economy to create employment, increased by 0.3pp to 66.5% (Q1 2022: 66.2%). Meanwhile, the number of people outside the labour force continued to decrease in Q2, recording 7.26mn persons (Q1 2022: 7.29mn persons) 

As compared to the second quarter of last year, the labour force expanded by 371,000 persons – up from 15.97mn persons in Q2 2021. In tandem, the LFPR increased by 0.9pp (Q2 2021: 68.3%).

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Both the male and female LFPR grew to record 81.8% and 55.8% respectively (Q1 2022: 81.5%; 55.6%). In terms of age group, those aged 25 to 34 in the male labour force had the highest participation rate at 95.8%, followed by 45 to 54 years and 35 to 44 years at 95.3%. Meanwhile, the highest LFPR for females was recorded in the age group of 25 to 34 years (79.1%), followed by 35 to 44 years (73.2%) and 45 to 54 years (55.6%).

The employment-to-population ratio for males and females also increased by 0.4pp and 0.3pp, registering 78.7% and 53.5% respectively as against the previous quarter.

Employment sees continued growth

The number of employed persons continued on its upward trend, with an additional 126,300 persons (0.8%), to record 15.70mn persons (Q1 2022: 15.57mn persons). On a year-on-year comparison, employed persons grew by 3.2% (493,900 persons) from 15.21mn persons in Q2 2021.

By gender, employed persons encompassed 61.1% of male employed persons, totalling 9.60mn persons, whereas female employed persons accounted for 38.9%, registering 6.10mn persons.

By age group, the data recorded was as follows:

  • 25 to 34 years: 34.2% of the total number of employed persons, making up 5.37mn;
  • 35 to 44 years: 25.7% (4.04mn persons), and
  • 15-24 years: 15.7% (2.46mn persons).

By educational attainment, employed persons with secondary education recorded the highest share at 56.6% (8.89mn persons). This was followed by employed persons with tertiary education, which made up 31.3%, or 4.91 million persons.

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The 'employee' category, which comprised the largest composition of employed persons, posted a quarter-on-quarter increase of 0.4%, which translates to a growth of 51,500 persons, to reach 11.87mn persons (Q1 2022: 11.82mn persons). Similarly, own-account workers and employers edged up by 2.4% and 5.6% to 2.77mn persons and 558,500 persons respectively (Q1 2022: 2.71mn persons; 529,100 persons).

Meanwhile, the unpaid family workers category saw a decline of 3.7% (-19,000 persons) to record 496,300 persons (Q1 2022: 515,300 persons).

Drop in unemployment

The unemployment rate recorded during the quarter was at 3.9%, having dropped by 0.2pp from 4.1% in the preceding quarter. With this, the number of unemployed persons in this quarter decreased by 29,200, to 642,000 persons (Q1 2022: 671,200 persons).

On a year-on-year basis, the unemployment rate also declined by 0.9pp, amounting to 122,900 persons as compared to the same quarter of the previous year (Q2 2021: 4.8%; 764,900 persons).

By category of unemployment, the report noted: that there were 567,500 persons who were actively unemployed, encompassing 88.4% of unemployed persons. This category increased by 0.1pp from the previous quarter (Q1 2022: 88.3%; 593.0 thousand persons) indicating more people who were available for work and were actively seeking jobs. 

At the same time, the percentage share of those inactively unemployed dropped by 0.1pp to 11.6% (Q1 2022: 11.7%; 78,200 persons).

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During this quarter, of those actively unemployed, 59.4% were those who were unemployed persons for less than three months, while 6.4% were persons who had been unemployed for more than a year or known as long-term unemployment.

The DOSM report further looked into unemployment by demographic.

The unemployment rate for youth aged 15 to 24 years dropped to 11.0% (Q1 2022: 11.1%) registering youth unemployment at 303,400 persons, as compared to the previous quarter (Q1 2022: 303,200 persons). At the same time, the unemployment rate for adults aged 25 to 64 years also went down by 0.2pp to register 2.5%, down from 2.7% in the previous quarter.

As such, the number of adult unemployment reduced by 29,400 persons to record 338,600 persons (Q1 2022: 2.7%; 368,100 persons).

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Taking a quarterly comparison, the number of persons outside the labour force dropped by 0.4% (31,400 persons) in Q2 2022, to record 7.26mn persons (Q1 2022: 7.29mn persons).

At the same time, the number of persons outside the labour force also decreased by 2.2% year-on-year (166,400 persons) - in Q2 2021, there were 7.42mn persons outside the labour force. More than half of those outside the labour force were female, comprising 69.4% (5.04mn) persons. Meanwhile, males comprised 30.6%, or equivalent to 2.22mn persons.

According to the report, the main reason for those outside the labour force was housework/ family responsibilities — this accounted for 42.2% or 3.06mn persons from the total outside the labour force, followed by schooling/ training making up 41.2% (2.99mn persons).

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Photo / DOSM labour force survey report

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