The demand for foreign workers in the manufacturing sector in Malaysia

Nasri Bachtiar, Rahmi Fahmy, Rahmah Ismail

Research output: Contribution to journalArticle

Abstract

The objective of this study is to investigate the demand for foreign workers in the manufacturing sector in Malaysia. In order to achieve this objective, the simultaneous equation model is developed and the analyses are based on data from the Industrial Survey conducted by the Department of Statistics Malaysia for the period of 1994-2005. The Labor demand model is derived from the Cobb-Douglas production function. The results from the estimation of the production function show that foreign workers in the category of professional significantly contributed to the output growth of ISIC 35, ISIC 36 and ISIC 38, while skilled workers and technical-supervisors also give a significant contribution to output growth in ISIC 31. The demand for foreign workers reveals that professionals and technical-supervisors are positively related to output level and wage rates. However, they are negatively related to the price of capital and local wage rate. It means that the professional and technical-supervisor foreign workers complement the local workers and capital.

Original languageEnglish
Pages (from-to)135-147
Number of pages13
JournalJurnal Ekonomi Malaysia
Volume49
Issue number2
DOIs
Publication statusPublished - 2015

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Workers
Malaysia
Manufacturing sector
Supervisors
Output growth
Wage rate
Labour demand
Simultaneous equations model
Production function
Demand model
Statistics
Skilled workers
Cobb-Douglas production function

Keywords

  • Demand
  • Foreign workers
  • Output
  • Wage

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)

Cite this

The demand for foreign workers in the manufacturing sector in Malaysia. / Bachtiar, Nasri; Fahmy, Rahmi; Ismail, Rahmah.

In: Jurnal Ekonomi Malaysia, Vol. 49, No. 2, 2015, p. 135-147.

Research output: Contribution to journalArticle

Bachtiar, Nasri ; Fahmy, Rahmi ; Ismail, Rahmah. / The demand for foreign workers in the manufacturing sector in Malaysia. In: Jurnal Ekonomi Malaysia. 2015 ; Vol. 49, No. 2. pp. 135-147.
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