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Income Inequality in Malaysia

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  • Haji Mat Zin RAGAYAH

Abstract

The objective of this paper is to examine the changes in Malaysian income distribution during the last three and a half decades and the reasons for the changes. It was found that the Gini ratio for Malaysia peaked in 1976 and fell thereafter to 1990. However, inequality seems to reverse its direction since then. Policies that could explain the changes in income distribution include the promotion of export‐oriented industrialization, education, and training, and the restructuring of equity ownership and assistance in asset accumulation. While the various other redistributive measures in the form of rural development helped in poverty eradication, their effectiveness in redistribution needs to be improved. Several hypotheses have been forwarded to explain the widening of income inequality after 1990. These include the difference in the growth rates of incomes of the rural and urban areas, trade and globalization, and impediments to the process of internal migration.

Suggested Citation

  • Haji Mat Zin RAGAYAH, 2008. "Income Inequality in Malaysia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 3(1), pages 114-132, June.
    • Handle: RePEc:bla:asiapr:v:3:y:2008:i:1:p:114-132
    DOI: 10.1111/j.1748-3131.2008.00096.x
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    References listed on IDEAS

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    1. Homi Kharas & Indermit Gill, 2007. "An East Asian Renaissance : Ideas for Economic Growth," World Bank Publications - Books, The World Bank Group, number 6798, April.
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    Cited by:

    1. Sharon G.M. Koh & Grace H.Y. Lee & Eduard J. Bomhoff, 2016. "The dynamics of public opinion towards inequality in Malaysia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 21(4), pages 578-598, October.
    2. Kim-Leng Goh & Nai-peng Tey, 2018. "Nai-peng Tey ; Faculty of Economics and Administration, University of Malaya Title : Personal income in Malaysia: distribution and differentials," Economics Bulletin, AccessEcon, vol. 38(2), pages 973-982.
    3. Takatoshi ITO & Akira KOJIMA & Colin McKENZIE & Shujiro URATA, 2009. "Editors’ Overview," Asian Economic Policy Review, Japan Center for Economic Research, vol. 4(1), pages 1-18, June.
    4. Medhi KRONGKAEW, 2008. "Comment on “Income Inequality in Malaysia”," Asian Economic Policy Review, Japan Center for Economic Research, vol. 3(1), pages 135-139, June.
    5. Joshua AIZENMAN & Minsoo LEE & Donghyun PARK, 2012. "The Relationship between Structural Change and Inequality: A Conceptual Overview with Special Reference to Developing Asia," Working Papers DP-2012-13, Economic Research Institute for ASEAN and East Asia (ERIA).

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