Earnings differentials determinants between skills in the Malaysian manufacturing sector

Rahmah Ismail, Haji Mat Zin Ragayah

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

The Malaysian manufacturing sector has been experiencing a gradual change in its production process as it shifts from labor-intensive to more capital-intensive techniques. This has led to a change in the skills required by the industries where skilled workers are in greater demand and where the wage ratio between skills favors the skilled workers. There are many factors that can influence an individual's earnings. These include educational attainment, job location, types of industries and sex. This paper attempts to measure the determinants of earnings differentials among skilled, semi-skilled and unskilled workers in the Malaysian manufacturing sector. The analysis is based on a survey of 2065 workers in six major industries conducted in 1999. These are the electrical and electronics, textile, wood-based, transport equipment, food and chemical industries. The determinants of earnings differentials are obtained by using the coefficients of the earnings functions. These factors are decomposed into several categories, namely human capital, individual characteristics and the residual. The results reveal that human capital variables, which comprise education, training and experience, play a significant role in determining the earnings differentials, particularly between skilled and semi-skilled workers and between semi-skilled and unskilled workers.

Original languageEnglish
Pages (from-to)325-340
Number of pages16
JournalAsian Economic Journal
Volume17
Issue number4
Publication statusPublished - Dec 2003

Fingerprint

skilled worker
manufacturing sector
manufacturing
human capital
determinants
industry
unskilled worker
educational attainment
education and training
food industry
chemical industry
wage ratio
wage
labor
food and luxury products industry
production process
electronics
worker
demand
education

Keywords

  • Earnings differentials
  • Human capital variables
  • Semi-skilled workers
  • Skilled workers
  • Unskilled workers

ASJC Scopus subject areas

  • Development
  • Geography, Planning and Development

Cite this

Earnings differentials determinants between skills in the Malaysian manufacturing sector. / Ismail, Rahmah; Ragayah, Haji Mat Zin.

In: Asian Economic Journal, Vol. 17, No. 4, 12.2003, p. 325-340.

Research output: Contribution to journalArticle

Ismail, Rahmah ; Ragayah, Haji Mat Zin. / Earnings differentials determinants between skills in the Malaysian manufacturing sector. In: Asian Economic Journal. 2003 ; Vol. 17, No. 4. pp. 325-340.
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