Harmonizing human capital: Insights from the Malaysian labor market
List of Authors
  • Low Choon Wei

Keyword
  • Job Mismatches, Qualifications, Experience, Human Capital

Abstract
  • The misalignment between workforce skills and qualifications and the demands of available job opportunities, poses a pervasive concern with far-reaching implications for economic growth and labor market efficiency. This phenomenon extends across geographical boundaries, impacting both developing and developed nations. In this study, we focus on the Malaysian context, where the intersection of labor market dynamics and educational expansion has yielded both positive and concerning outcomes. Despite an expansion in the labor market and education sector in Malaysia, the underemployment rate increased to 37.4% in the fourth quarter of 2022, revealing a noteworthy challenge. This study presents empirical evidence on job matching among Malaysian employees, specifically investigating the likelihood of job mismatch attributed to human capital factors, including working experience and education attainment. The analysis is this study notably emphasizes the pivotal role of working experience and educational attainment in influencing job-matching outcomes. Individuals with a wealth of working experience, quantified in years, exhibit a reduced likelihood of job mismatch, highlighting the significance of accrued expertise in securing suitable employment. Similarly, those holding tertiary education qualifications are found to be better positioned in the job market, further diminishing the risk of job mismatch. In essence, this study serves as a clarion call for policymakers, educators, and stakeholders in the Malaysian labor market to recognize the crucial role of human capital development in addressing the pressing issue of job mismatch. The implications of these findings extend beyond Malaysia, resonating with global efforts to foster labor market efficiency and sustainable economic growth by ensuring a harmonious alignment between workforce capabilities and the demands of the contemporary job landscape.

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