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Inequality and Determinants of Earnings in Malaysia, 1984-1997

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  • Branko Milanovic

Abstract

Using three large nationally-representative Malaysian Household Income Surveys from 1984, 1989 and 1997, the present paper examines inequality and determinants of earnings. During the period 1984-1997, Malaysia's real per capita GDP increased by approximately 70percent, the participation rates for both men and women went up among all age groups, and the average number of years of schooling increased by 1.2years. There was a significant relative wage improvement among the bottom deciles. The rate of return to an additional year of schooling remained high (at 10percent), despite the huge increase in the supply of the highly educated. The stable overall rate, however, masks an increased rate of return on women's education, and a decreased rate for men. Wage discrimination against women amounts to 16-20percent, and the bias has increased in 1997. The pro-Chinese earning ethnic bias is estimated at 31percent. Copyright 2006 East Asian Economic Association and Blackwell Publishing Ltd..

Suggested Citation

  • Branko Milanovic, 2006. "Inequality and Determinants of Earnings in Malaysia, 1984-1997 ," Asian Economic Journal, East Asian Economic Association, vol. 20(2), pages 191-216, June.
  • Handle: RePEc:bla:asiaec:v:20:y:2006:i:2:p:191-216
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    Cited by:

    1. Eric D. Ramstetter, 2014. "Wage Differentials between Foreign Multinationals and Local Plants and Worker Quality in Malaysian Manufacturing," Asian Development Review, MIT Press, vol. 31(2), pages 55-76, September.
    2. Risti Permani, 2009. "The Role of Education in Economic Growth in East Asia: a survey," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 23(1), pages 1-20, May.
    3. repec:ebl:ecbull:eb-17-00973 is not listed on IDEAS
    4. Ramstetter, Eric D., 2017. "Foreign Workers, Foreign Multinationals, and Wages after Controlling for Occupation and Sex in Malaysia’s Manufacturing Plants during the mid-1990s," AGI Working Paper Series 2017-13, Asian Growth Research Institute.
    5. Devadason, Evelyn, 2007. "Do Trading Partners Matter for Labour Market Inequality? The Malaysian Case," Review of Applied Economics, Review of Applied Economics, vol. 3(1-2).
    6. Ramstetter, Eric D., 2014. "Exporting, Education, and Wage Differentials between Foreign Multinationals and Local Plants in Indonesian and Malaysian Manufacturing," AGI Working Paper Series 2014-03, Asian Growth Research Institute.

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