Youth unemployment in Malaysia

Youth unemployment is a growing global problem that has significant long-term ramifications on individuals, society and economy. If the current high youth unemployment trends are not contained or reversed quickly, it will have serious implications for future growth and social cohesion.

The International Labour Organisation’s (ILO) report on Global Employment Trends for Youth 2017 indicated that though global youth unemployment rate has been settling at 13.0% during the period 2012-14 and rose marginally to 13.1% in 2017, it remains well above pre-crisis rate of 11.7% in 2007.

In Malaysia, the statistics on youth employment provide an overall trend of high youth unemployment, albeit easing from the recent peak. Malaysia’s youth unemployment rate of 10.8% in 2017 is the third highest among the ASEAN-6. The average youth jobless rate of 10.7% posted during the period 2001-2017 was higher than 9.2% registered during the period 1991-2000. Though the youth unemployment rate aged between 15 and 24, as a percentage share of total labour force had declined from a peak of 11.9% in 2009 to 10.8% in 2017, it remains above the long-term average of 10.1% during 1991-2014. Of particular concern is the rising number of unemployment in the “20-24” age group, which accounts for half of total unemployed youth.

The worrisome trend is a rapidly increasing unemployed graduates from 143,600 persons in 2008 to almost 203,500 persons in 2017 or equivalent to an unemployment rate of 7.7% of total youth labour force compared to 6.8% in 2008. This makes up 40.5% of total unemployment. In 2017, we have a total of 134,054 Malaysian graduates with a bachelor degree from both public and private universities.

Youth employment is a top policy concern. Both the policy makers, including educationists and private sector employers need to critically address the issues of unemployment and underemployment of the Malaysian youth.

The mobilisation of youth resources in economic and social developments not only enhance a country’s national income growth via productivity and generate economic welfare growth but also reap enormous benefits from demographic dividend. As such, reducing the youth unemployment holds the key to transforming Malaysia’s youth bulge into a demographic dividend.

This research paper will analyse the trends and developments of youth unemployment in Malaysia. What are the characteristics of youth unemployment, with emphasis on graduate unemployment? It also offers some policy recommendations to tackle both structural and cyclical issues, which are required to enhance the employability of our youth.