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Institute of Labour Market Information and Analysis (ILMIA)
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What is the function of ILMIA?

ILMIA serves as an information centre for labour data and analysis for the Malaysian labour market. At ILMIA, we are responsible for ensuring that data is accurate and up to date as well as facilitating data sharing with users. ILMIA is also the agency responsible for conducting research / studies on the labour market in Malaysia. The results of these studies will be published and used as a guide for policy-making relating to national labour.

What kind of data can be obtained from ILMIA?

Among the data that are available are data on key labour market indicators, supply and demand by economic sectors and NKEAs, average wage according to sectors, and skills by occupation.

Who uses ILMIA Portal?

ILMIA aims to inform users that are government, independent researchers, self-employed and employers, employees, students and public. The ILMIA portal can be used by all categories of user and strives to use language that is simple, non-technical and easily understood by all.

From where does ILMIA source the data that it analyses?

Data sources are obtained principally from several government agencies such as the Department of Statistics, Ministry of Education, Bank Negara Malaysia, the Economic Planning Unit, Ministry of Human Resources and others, including the private sector if made available.

What is the difference between the terms 'Labour Force' and 'Workforce'?

The term 'labour force' refers to all people in Malaysia aged between 15 and 64 years who are at work or unemployed. The 'Workforce' is another category which includes those who do any work for pay, profit or family gain (whether as employer, employee, self-employed or unpaid family worker).

What is the definition of 'Unemployment' and the 'Unemployment Rate'?

  • 'Unemployment' means the population aged between 15 and 64 years in the labour force category who are willing to, and actively looking for, work.
  • 'Unemployment rate' means the number of unemployed compared to the total labour force expressed as a percentage.

What is meant by 'Outside The Labour Force' and how does it differ from unemployment?

'Outside the labour force' refers to those who are not classified as employed or unemployed, such as housewives, students, retirees and those not interested in finding employment. Unemployed, on the other hand, means those who have yet to get a job but are willing to, and actively seeking, work.

Is the unemployment rate in Malaysia better than in other countries?

Overall, the unemployment rate in Malaysia is on average 3.4% (2016). This rate is lower than that in Australia (5.8%) and Brazil (5.6%). Malaysia's unemployment rate is basically stable and some would consider that full employment in the economy has been achieved. Although, in principle, a lower unemployment rate indicates the economy is steady, the unemployment rate will not reduce to zero as there will always be unemployment due to frictions or timing lags, as a result of, for example, employees moving to new jobs or changes in technology.

How can i get hold of books published by ILMIA?

Books and journals published by ILMIA are available online (softcopy) in the publications section. In addition, users can apply in writing or visit ILMIA's office to get printed copies.

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Labour Force Participation Rate

 

Labour Force Participation Rate

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Why LFPR is important?

The labour force participation rate (LFPR) is a measure of the proportion of the working age population in Malaysia who are employed or actively looking for gainful employment. At any point in time in Malaysia, the working age population is defined to be all persons between the ages of 15-64 years old. The LFPR thus provide information on the size of the labour or work force available to engage in productive activities in the economy. The workforce at any point in time is composed of persons who are employed and those who are unemployed, including those looking for employment for the first time or in transition between jobs. In general, the working age population who are not in the labour force are those persons who are in learning or training institutions; those who are retired and have no intention of rejoining the labour market; those who are physically or mentally or health-wise unable to work and those who are otherwise not actively looking for work. The workforce can also be separated by gender, age cohorts and other analytical groups. The workforce and working age population includes Malaysian and non-Malaysian citizens. The LFPR is expressed in percentage and is derived as follows:

LFPR
Size of the Labour Force
Size of the Working Age Population

The data for estimating the LFPR is captured through the Labour Force Survey conducted periodically by the Department of Statistics Malaysia (DOS) using the household survey methodology.

Why LFPR is important?

LFPR plays a central role in determining the size and composition of the workforce as well as contributing to projecting the future labour force. The variety of profiles that can be generated using this indicator is very helpful for understanding the labour market behaviour of different categories in the population, for example by gender, age group, strata, state and more. LFPR is also crucial in formulating employment policies as well as training needs in efforts to raise the participation rate in the labour market.

Limitation/ Comparability

Though LFPR is one of the main indicators of the labour market, there are some limitations to analysing the data. The LFPR data are obtained from household surveys which are designed to reflect the specific characteristics of Malaysia. Over time as seen in the indicators above, definitions and coverage may change as the demographic and economic characteristics of the country evolve. Thus great care must be taken when comparing indicators across time and analytical groups to take into consideration variations in concepts and methodologies. This is especially the case when benchmarking against the development in other countries. Labour force data may vary from one country to another, depending on the type of questions asked and the coverage in the survey questionnaires. Moreover, much of the information collected reflect activities in the formal sector of the economy, while there may be important informal activities which may be judged significant enough for consideration and thus need to be captured in the analysis.

Moving forward

For the future there are plans to further disaggregate and analyse the LFPR indicator and undertake additional research to collect evidence to explain the changes and trends observed in this indicators. In particular, further information and understandings are needed to support purposeful efforts to increase the female LFPR in general and to encourage them to remain within the workforce for longer. ILMIA will work with Talent Corporation and the Ministry of Women, Family and Community Development in this endeavour. The Ministry for Women has introduced initiatives for flexible working arrangement for women called “flexWorkLife.my”. This initiative aims to create better connection between employers and employees to optimise work-life balance as well as maximising work efficiency. It also offers many appealing benefits that should help to boost the female participation in the labour market moving forward.

There are also plans to undertake further work to better understand not only the LFPR for youth but also other labour market indicators focussed on the young population, e.g. KILM 10.

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