Ethnic disparity in financial fragility in Malaysia

Purpose – The purpose of this paper is to investigate the extent of financial fragility and its disparity across ethnic groups in Malaysia. Disparities related to income and wealth are major concerns as they breed conflict and social instability. The study also compares the level of financial fragility of Malaysians with their neighboring Asian counterparts. Design/methodology/approach – This study uses the World Values Survey to construct two financial fragility measures. Descriptive analysis is used to compare the level of financial fragility of Malaysia with other Asian countries. Ordinary least squares and generalized ordered logit regressions are applied to determine the existence of ethnic disparity in financial fragility in Malaysia. Findings – There exist ethnic differences in financial vulnerability in Malaysia where Malay and Indian are in a more financially fragile situation compared to Chinese. Other socio-economic factors and character trait also impact financial fragility. Compared to neighboring countries, the level of financial fragility in Malaysia is low. Nevertheless, over 40 percent of the Malaysians are just getting by in terms of their expenditure relative to income. They may be at risk to financial shocks without adequate savings or funds. Social implications – Ethnic disparity in financial vulnerability added to the inequality in income and wealth can pose a serious threat to Malaysia which attempts to achieve long-lasting social harmony and sustainable development. Originality/value – This is the first study that attempts to compare the level of individual financial fragility across Asian countries. It also makes use of a larger scale survey and a more representative sample to examine ethnic disparity in financial fragility in Malaysia. In addition, character trait is included in the analysis to provide a better understanding of human behavior in affecting financial outcomes

Household bargaining, financial decision-making and risk tolerance

This study examines the financial investment decision-making and risk behaviors of Malaysian men and women. It uses data obtained from a survey of employed Malaysians to test two opposing models of household decision making, the income pooling hypothesis and the bargaining model. Ordinal probit regressions are estimated to determine if earning share affects decisions on financial investments, and to identify factors that affect risk tolerance of men and women. The results indicate that although both men and women practice autonomy in decisions related to financial investments, women have lower risk tolerance than men. The results on decision making are consistent with the bargaining model as reflected in the importance of relative earning share in financial decision making

Household decision-making in Malaysia: the ethnic dimension

Household financial decision-making process is an important issue as it has shown to have implications on key development outcomes such as child health and education,nutrition, expenditure, and allocation of labor. Women’s ability to have control over household finances and decisions also reflects, to some extent, their level of empowerment. This study focuses on the effect of ethnicity on decision making in a household. There is relatively limited research in this area and data obtained from households in Malaysia, a multi-ethnic and multi-cultural country, provides an opportunity for an in-depth examination of the ethnic dimension. The data is obtained from a random survey of 672 Malaysian urban households of which the selection of sample was strictly determined by the Department of Statistics Malaysia to ensure randomness. The findings show that there are differences across households of different ethnicity. Chinese households are found to be more traditional and patriarchal where decisions on household financial matters are more husband-dominated. Education contributes positively in giving women more control over household finances and decision-making. The results of the study highlight the importance of ethnicity in determining the level of household bargaining and decision making power which has implications on strategies in marketing as well as national policies. Thus, any substantive and policy inferences in relations to women’s empowerment must take into account the socio-cultural aspects, rather than based on overall national level analyses. The finding that education plays a significant role in empowering women is a positive outcome. With more Malaysian women attaining higher levels of education and becoming part of the workforce, their level of empowerment and wellbeing will improve and consequently provide a positive impact on key development outcomes of the countr

Medical tourism: miracle or mirage?

Purpose – Medical tourism is a recent phenomenon that has generated much interest due to its huge economic potential. In the ASEAN region, Thailand, Malaysia and Singapore have the government machinery involved in expediting the growth of the industry. The purpose of this paper is to explore the impact of medical tourism on the healthcare delivery system of Malaysia as a destination country, with comparison made to Singapore and Thailand. Design/methodology/approach – The paper is based on a review of literature on medical tourism and secondary data obtained from government official documents. The literature is analyzed to draw out substantive issues affecting destination countries arising from the rapid growth of medical tourism. Findings – The authors argue that while patient inflow and revenue has been on the uptrend in Malaysia, the manifestation of rapid growth of the industry needs further evaluation. Malaysia still lags behind Thailand and Singapore in capitalising on the full economic potential of the industry. At the same time immediate impact such as internal brain drain has been observed. Policy framework needs reevaluation in order to assure benefits from the industry permeate all levels of society. Originality/value – This paper looks beyond marketing and motivation of medical tourism, to its socio-economic impact on Malaysia as a destination country. Policy recommendations formulated adds value to the study. Keywords – medical tourism, medical outsourcing, international medical travel, health tourism

The association between household debt and marriage satisfaction in the context of urban household in Klang Valley, Malaysia / Yunchao Cai … [et al.]

By using the data collected from urban households in Klang Valley, Malaysia, this study tries to provide empirical evidence on the effect of household debt on married Malaysian couples on their marital satisfaction. This study wishes to extend the implications of household debt in Malaysia beyond economic concern per se. We found that household debt does have a negative association with marriage satisfaction for married couples in Klang Valley Malaysia. Such relationship is valid even financial wellness and other demographic variables are controlled. Moreover, the less secured personal debt shows a significant negative relationship with the couple’s marriage satisfaction compared with no evidence on the impact of housing loan

Relationship between religiosity and individual economic achievement: evidence from South Kalimantan, Indonesia = العلاقة بين التدين والإنجاز الاقتصادي للأفراد: ادلة من جنوب كاليمانتان, إندونسيا

This study investigates the effect of religiosity on economic development or achievement of individuals in South Kalimantan, Indonesia. This province is of interest as its people are viewed as highly religious but lagging in economic development. The study attempts to address the measurement issues found in earlier studies at the micro level of analysis by constructing a multi-dimensional measure of religiosity. This study considers five dimensions of religion, namely: ritualistic, experiential, ideological, consequential and intellectual. Apart from the construction of a multi-dimensional measure of religiosity, an indicator of economic wellbeing is formulated other than income. The results show that Muslims in South Kalimantan have a high level of religiosity and that those with higher level of religiosity are economically better-off. Education was also found to be a significant determinant of individual economic achievement. Hence, religion and education must be emphasized for economic progress especially for South Kalimantan which has a low level of education

Essays on temporary work

Three essays on temporary work are presented. The first two essays examine several factors that contribute to the dramatic increase in temporary employment. The first essay develops a theoretical model to illustrate how employers experiencing fluctuations in product demand use temporary workers to maintain flexibility in their labor input and reduce cost. The essay then presents empirical evidence of the significant role temporary workers play in accommodating for demand variations. The results suggest that increases in uncertainty in product demand is partly responsible for the growth in temporary employment. Apart from hiring temporary workers as a buffer against demand shocks, some firms use temps as a way to recruit and screen prospective (permanent) employees. The second essay examines this issue by focusing on several characteristics of a position and analyzes their effect on the type of employment contract that is offered to a worker. The analysis reveals that increases in the cost of dismissal help explain the rise in temporary employment. In the third essay, the link between wages, gender and temporary work is considered. A simple model that is constructed provides an explanation for the observed differences in wages between women and men. Women, if expected to have a weaker attachment to the labor force, will be less accessible to and earn lower wages than men in high-training jobs. A key feature of temporary work, that temporary workers receive little training compared to their permanent counterparts, provides a unique way to testing for this hypothesis

Productivity-employment link and asymmetric adjustments: the case of Indonesia, Malaysia and Thailand

The theoretical link between employment and productivity can be bi-directional, and the effect of one on the other can be both positive and negative. Unemployment reduces productivity through reduction in spending on education and training, but improves productivity by removing the least productive firms from the economy. Meanwhile, an increase in productivity reduces the demand for labor as workers are more efficient, but leads to greater employment through an increase in production. This paper focuses on three south-east Asian countries, namely, Indonesia, Malaysia and Thailand to test the theory and applies cointegration and error correction models to determine the interactions between productivity and employment. It considers asymmetric adjustments since studies have shown that a long-run relationship may not be detected using cointegration analysis which assumes symmetric adjustments. The results indicate that no definite long term relationship can be established between employment and productivity for Indonesia and Thailand. However, a positive equilibrium relationship between productivity and employment is obtained for Malaysia. Both variables adjust to deviations from the long-run equilibrium value, but the way they adjust differs. Employment quickly adjusts to negative discrepancies, but is less readily to decrease. In contrast, productivity adjusts to positive discrepancies but displays persistence for negative discrepancies

The long-run and dynamic behaviors of wages, productivity and employment in Malaysia

Purpose – This paper aims to examine the long-run and dynamic behaviors of real wage-employment-productivity relationship, using Malaysian manufacturing data, and to determine which related labor theories are supported. Design/methodology/approach – Time-series econometric techniques, which include stationarity and cointegration tests, vector error correction model, impulse response function and variance decomposition, are applied to analyze the relationships of real wages, employment and productivity. Findings – A long run relationship exists between real wages, employment and real productivity, with real wages being the main variable that adjusts to maintain cointegration. The theory that real wages inversely affect employment is not supported, while the performance-based pay scheme theory, and not the efficiency wage theory, is validated. Research limitations/implications – Although the data used to measure wages and employment account for most of the production in the various manufacturing sectors, they do not include all the manufacturing industries. The analysis is also limited in time span since data for earlier periods are not available. Practical implications – The findings can provide assistance to policy makers in their implementation and evaluation of labor policies. Originality/value – The real wage-employment-productivity relationship is examined in the framework of the Malaysian manufacturing sector, and the study includes both the long-term and short-run behaviors of the variables