Labour Mobility and Unemployment : Some Evidence from Labour Force Survey

The rise and persistence of unemployment emerged as a serious macroeconomics problem during the 1980s. This highlighted the possibility of imperfect labour mobility as significant factor. Thus, understanding the relationship between labour mobility and unemployment is important in analyzing the unemployment during the 1980s. Using Labour Force Survey (LFS) data from 1975 to 1990 inclusively, this dissertation analyzes this relationship at both aggregate and disaggregate levels. At the aggregate level, the relationship appears to be negative with no evidence that labour mobility drives aggregate unemployment. This negative relationship also emerges at industry and regional level. These results point against sectoral shock explanations for the rise in joblessness. However, both high unemployment industries and regions have higher mobility. This suggests that the unemployment can affect mobility differently at two levels. First, at the aggregate level, it may reduce mobility through its effects on job offer arrival probabilities, and the potential cost of changing industry. At the industry and regional level, it may raise mobility. Since the unemployment differences across industries and regions represent varying employment opportunities and prospects, high differences may encourage mobility towards low unemployment industries and regions. The data also suggests a role for individual heterogeneity. Among the selected high unemployment demographic groups, old workers, male workers, and nonwhite workers have low mobility. However, high unemployment young and manual workers, they have high labour mobility. Thus, low mobility as symptom of high unemployment only applied to certain groups. Policies constructed to reduce unemployment by raising mobility must target the appropriate groups

Overeducation and happiness in the Malaysian graduate labour market

The objective of this paper is to examine overeducation among Malaysian graduates with focus on its association with predetermined (before they enter the labour market) and current level of overall life happiness.Results reveal that there are a substantial percentage of overeducated graduates.Graduates who reported a higher level of predetermined happiness are less likely to be overeducated. Overeducation is also significantly and negatively associated with one’s current level of happiness.This finding suggests ‘hysterias’ of overeducation and supports Job Competition Theory’s prediction on persistent of overeducation.Thus, happiness might be one of the reasons why overeducation is a persistent and durable phenomenon

Revisiting The Easterlin Paradox: What Can We Learn from It?

This paper examines the Easterlin paradox using empirical and simulated data. The results reveal that the existence of Easterlin paradox could be just due to the rating scale of happiness measurement. The rating scale measurement of self-reported happiness limits the variation of happiness of time series data due to the averaging effect compared to the happiness variation of cross-sectional data. Mathematically, the low variation of happiness can lead to the Easterlin paradox: cross-sectional effects of income on happiness are significant but turn into insignificant for time series happiness. The result of simulated data without the scale of happiness measurement, i.e., the underlying happiness, shows that the effects of income on happiness are significant at cross-sectional and time series data. Nevertheless, once the limited scale of happiness measurement, i.e., the self-reported happiness, is used, the income effect is significant only at cross-sectional data. Thus, the low variation in scale of measurement can be the cause of the Easterlin paradox. What we can learn is: the limited scale of happiness measurement produces the Easterlin paradox, and the happiness measurement needs to be revised to ensure the variation in happiness could be captured adequately

Estimating the determinants of vehicle loan default in Malaysia: an exploratory study

As revealed by Malaysia’s bankruptcy statistics, around a quarter of bankruptcy in Malaysia is due to default of vehicle loan.This has led to the tightening up of vehicle loan underwriting and increased vehicle loan rejection rates. The need for a better credit risk scoring model is also raised by the banks.This warrants a study to estimate the determinants of vehicle loan default in Malaysia.This paper estimates the determinants of vehicle loan default probability which could be used to build a loan default prediction or forecasting model for credit risk scoring purposes.Using a simple random sample of 138 car loan borrowers that was provided by an established bank in Malaysia, the descriptive statistical procedures and econometrics modelling were performed to unveil these vehicle loan default determinants.Results of descriptive statistics revealed that more than half of the borrowers were default.Results of logit models further revealed that loan related characteristics are the most important determinants of probability of default.Specifically, the significant determinants of loan default were: areas of residence, vehicle purchase price, length of service, existing relationship with bank, interest rate, and available guarantor.Borrowers who are in high risk of default are characteristically those who reside in rural areas, secure higher vehicle purchase price, have longer length of employment service, are borrowers new to the bank, acquire loans charged with high interest rates, and are without a guarantor

Estimating the determinants of vehicle loan default in Malaysia: an exploratory study

As revealed by Malaysia’s bankruptcy statistics, around a quarter of bankruptcy in Malaysia is due to default of vehicle loan.This has led to the tightening up of vehicle loan underwriting and increased vehicle loan rejection rates. The need for a better credit risk scoring model is also raised by the banks.This warrants a study to estimate the determinants of vehicle loan default in Malaysia.This paper estimates the determinants of vehicle loan default probability which could be used to build a loan default prediction or forecasting model for credit risk scoring purposes.Using a simple random sample of 138 car loan borrowers that was provided by an established bank in Malaysia, the descriptive statistical procedures and econometrics modelling were performed to unveil these vehicle loan default determinants.Results of descriptive statistics revealed that more than half of the borrowers were default.Results of logit models further revealed that loan related characteristics are the most important determinants of probability of default.Specifically, the significant determinants of loan default were: areas of residence, vehicle purchase price, length of service, existing relationship with bank, interest rate, and available guarantor.Borrowers who are in high risk of default are characteristically those who reside in rural areas, secure higher vehicle purchase price, have longer length of employment service, are borrowers new to the bank, acquire loans charged with high interest rates, and are without a guarantor

The impacts of oil shocks on Malaysia's GDP growth

This paper suggests that instrumental variable regression is a good alternative to nonlinear specification model when estimating the impacts of oil shocks on GDP growth in Malaysia

The effectiveness of location incentive: An analytical study of manufacturing SMEs in the Kedah State

The main objective of this research is to find out the effectiveness of location incentive in att racting Small and Medium Enterprises (SMEs) to a certain industrial location in the state of Kedah. The location choice identified in this research would be Sungai Petani and non-Sungai Petani industrial areas. By using the logit model, we found that location incentive is not as effective as other factors in attracting SMEs in setting up their establishments in Kedah. The important factors that influence the location choice of manufacturing SMEs are (i) the years of operation of an SME, and (ii) the physical distribution of an SME product

Deciphering drivers of efficiency of bank branches: Malaysian reality

Measuring and bench marking efficiency of bank branches has always been one of the key areas of concern of the top management of banks.It has also been on the research agenda of many scholars across many countries who have published their work in various academic journals.In Malaysia, a country which is one of key emerging nations in south-east Asia, there are many studies which dealt with measuring efficiency and productivity of banks using various operational research techniques including non-parametric Data Envelopment Analysis (DEA) technique.However, so far there is no published work which addressed the efficiency drivers at the branch level.Present paper aims to fill-in this gap in the literature. A two-stage approach has been adopted in analyzing the financial performance of 247 branches in 2014 spread over 14 states of the country of a large commercial banking group in Malaysia. In the first stage of analysis, the study has adopted DEA technique input oriented variable returns to scale formulation to estimate the technical efficiency of these branches.Four input parameters viz., Interest Expense, Personnel Expenses, Establishment expenses and Other Operating Expense have been used as input parameters and Total Deposit, Total Loan, Amount of Wealth Management Business, Interest Income and Non-Interest Income have been used as output parameters.These parameters are reflective of the Inter mediation and Profit efficiency of the branches.In view of potential bias in the estimation process, the efficiency scores obtained in Stage-1 of the analysis were bootstrap corrected using the formulation of Bogetoft & Otto before they were used as dependent variable in Stage-2 of the analysis where Tobit Regression was carried-out to decipher the drivers of efficiency of bank branches.Four possible driver variables like log of total business (to assess the effect of ‘size’ on efficiency), log of Current and Savings account deposit (CASA) to Total deposits (to assess the impact of deposit mix on efficiency), log of Deposit per employee, log of Loans per employee and Income per employee (to assess the impact of Productivity of manpower on efficiency), Business per transaction (to assess the impact of Transaction efficiency) have been used in the Tobit regression.In addition, two environmental dummies viz., Per Capita State Gross Domestic Product and the level of Competition in garnering business in each state (measured in terms of percentage of branches in each state of the country) to reflect the impact of spatial parameters as possible drivers of efficiency have been used at this stage of the analysis.Results suggest that deposit per employee is significant(at 1%) driver of efficiency of branches; size has a negative effect (significant at 5%) in determining branch efficiency probably reflecting of the aim of the Bank to focus more on revenue growth at the aggregate level rather than cost efficiency at the branch level. Other significant ( at 10%) drivers of branch efficiency are CASA to total deposits and Business per transaction with CASA playing dominant driver amongst all the drivers of efficiency of branches of the bank.Loan per employee was not found to be significant probably due to the fact that branches do not have power to sanction loan. Per capita GDP was found to be positive driver of efficiency; the effect however, is more dominant in branches which are located in states in top 25th percentile GDP per capita.Similarly, competition was found to be positive driver of efficiency in branches located States in top25th and 50th to 75th percentile in terms of branch concentration.The results reported in the study would not only be of key interest of the top management of banks but also to Bank Negara Malaysia, the central bank of the country which is keenly fostering efficiency in the Malaysian banking arena ever since it carried out the merger and consolidation in the financial services sector in 2000. The results would also attract the attention of future researchers in the arena of Malaysian banking

Factors affecting choice for education destination: A case study of international students at Universiti Utara Malaysia

The importance of higher education services as a new source of income has intensified the effort not only by the developed nations but the developing countries alike, to offer their services to the international students. Most countries recognize that maintaining quality education is crucial as to ensure the long term competitiveness. Quality education signifies a very broad definition and it is vital for each country to correctly identify the factors that really attract international students to pursue their studies in particular places. With regard to the issue, this study attempts to identify the possible factors that may influence the decision making of international student when choosing higher education destination. In order to arrive at the result, we carry out the study by determining the factors that significantly influence the international students to recommend Universiti Utara Malaysia (UUM) to their friends in their home country. The study is conducted using a sample of 300 international students. The factor analysis and a regression using the logit model are used. The finding suggests that excellent services, pleasant social environment, first class physical infrastructure and high quality of lecturers matter