Introduction & Background

KILM 14 shows the distribution of the knowledge base of the labour force which could also be extended to reflect the skills level of the workforce, both employed and unemployed. At the international level, the educational attainment of the work force is usually depicted according to five different categories of schooling: less than one year, pre-primary level, primary level, secondary level, and tertiary level. In Malaysia, consistent with the international norm, the educational attainment is classified into four broad levels comprising - no formal education (including responders giving no information), primary (UPSR), secondary (PMR, SPM, STPM) and tertiary (TVET, Diplomas, Degrees). The categories of educational attainment adopted by Malaysia is based upon the 1997 International Standard Classification of Education (ISCED-97) developed by the United Nations Education, Scientific and Cultural Organization (UNESCO). Details of the Malaysia’s ISCED-97 classification are provided in the table below (source: Department of Statistics). The use of standardized indicators and statistics in the area of education allows developments to be comparable across countries and internationally and thus permit benchmarking and the drawing of policy lessons from the experience of other countries that have undertaken successful reforms of their education and skills training systems. ISCED provides contents on the levels of education and the fields of education. ISCED-97 is an expanded version of the earlier ISCED-76. An updated version, ISCED-2011, with broader classifications is scheduled for implementation by 2014.

Level of Formal Education

The ILO states that literacy is defined as the skills to read and write a simple sentence about everyday life. The absence of such skills makes one an illiterate. The definition of illiteracy often varies from country to country. In Malaysia, illiteracy applies to people who have had no formal or informal schooling and have never enrolled in any form of educational or training institutions.

The measurements of educational attainment and illiteracy are often disaggregated further by gender and age group. Information for KILM14 are captured through periodic Labour Force Surveys conducted by the Department of Statistics Malaysia using the household survey methodology.

In an economy, human resources (labour) is the most important factor of production, other than capital and land, that in combination contribute to the output of goods and services leading to the generation of income, consumption and trade. To meet the economic growth aspirations of the country, the strength, health and skill levels of the workforce are very important determinants. In this context, the education attainment of the workforce has a direct role in shaping the skill level of workers. There are several ways for portraying skills, which in Malaysia and elsewhere have been represented by both education attainment as well as by occupation as explained in KILM 5. More importantly, in coordination with KILM 5 on occupation, information from KILM 14 on education attainment support the formulation of economic and labour policies as well as provide essential inputs for educational planning or investments, skills training and employment services. KILM 14 also contributes to the identification of the needed changes in skill levels to meet the requirements of industry, provides key variables to employment projection models with links to future skills needs, as well as supply advice to students and jobseekers on expected job prospects and the associated training and educational qualifications. It gives insights into the skills structure in the labour force to determine skills gaps and shortages in the labour market. In addition, the concept of employability must supplement the educational attainment level of the workforce, which requires the acquisition of the requisite core, hard and soft skills.

As Malaysia aspires to be a high income nation with a focus on innovative, technological and knowledge-based new growth areas, the educational attainment level must keep pace in order to achieve these objectives. Malaysia is a small open economy with a relatively narrow but tight labour market and thus it must mostly rely on the skill capabilities as reflected in educational attainment of the workforce to successfully compete economically in the global markets in a sustained manner. The information from KILM 14 will help the country to augment and adjust the needed level of skills to be acquired by the workforce through the accumulation of experience at the workplace and supplemented through informal and formal education, training and upskilling.

Employment services would need to be expanded to emphasize life-long-learning and human resources functions need to prioritize career management.

KILM 14 also provides information about issues surrounding employment creation. Specifically, viewed together with KILM 9 on Unemployment, it provides insight into the relationship of trends in unemployment and educational attainment, especially among the youth population. For example, persistent unemployment among the workforce with tertiary education classified as high skilled, may indicate either issues with employability, i.e. mismatch of skills to jobs available, or more of concern, that the economy is not creating sufficient jobs to accommodate the growing workforce with these educational attainment (see KILM 2 on employment creation). One could have a situation where a worker is pressured to take a job well below the educational or skill level attained because of financial obligations, leading to the presence of skills-related underemployment. In some countries, and may be also in Malaysia, this may lead to a situation of “brain drain” where educated professionals migrate abroad to seek jobs to match their educational or skill levels and aspirations.

Minimum basic skills are essential to be an effective worker, which requires some rudimentary literacy and numeracy. The measure of illiteracy is thus an indicator and one measure of how distant the workforce is from supporting sustained growth to allow the population to reduce the incidence of poverty that is closely associated with illiteracy. In Malaysia, illiteracy is no longer an issue for the workforce.

A number of factors limit the comparability of education attainment information over time and across countries. As such information is collated through labour force surveys, over time definitions and coverage may change as the demographic and economic characteristics of the country evolve. This is especially relevant, as ISCED-97 has evolved from ISCED-76 and ISCED-2011 is about to become effective. Even so, different countries have adapted their system to the international standard, which allows some variation and therefore need reconciliation to permit comparability. For example, assigning individuals among the different levels or types of education may differ quite substantially between countries. Many countries have difficulties in mapping the national definition to the standard set by ISCED. This is especially so when considering technical or professional training programmes, short term programmes and adult- oriented programmes.

Although illiteracy is not an issue for Malaysia, there some limitations on comparability of this indicator. The main factor is variations in the definition of illiteracy. While Malaysia prefers a definition based on school attendance, many countries utilize the ability to read and write a simple sentence as the yardstick. As countries have diverse social and cultural environments there are also other definitions. Some countries in Africa consider the inability to read a newspaper as illiteracy, while some in Europe would consider as illiterate someone who did not complete primary schooling.