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3 Important Factors Contribute to Female Labor Force Participation in Malaysia

In: Business and Management

Submitted By nemotang1994
Words 589
Pages 3
The general factors leads to female labor force participation rate (FLFPR) increase are rising real wage rates for women, productivity in the household and divorce rates, changing preferences and attitudes, declining birth rates and women attempt to maintain living standards (McConnell, Brue, & Macpherson, 2013). The aim of this essay is to discuss three vital factors influence female workers participate in Malaysia labor force (LF). First of all, globalisation effect is one of the factors that considered to has significant impact on female labor supply (FLS) in Malaysia (Tin & Ismail, 2013). Due to globalization effect allow free flow of inputs including labor which may increase cost of living and wage rate for locals (Tin & Ismail, 2013). Furthermore, statement by Hoem and Hoem 1989, Reskin and Padavic 1994 (as cited in Siah & Lee, 2014) stated that rising opportunity costs of homemaking as women’s real wages rose, and rising consumption aspirations have lead to FLFPR increase. Thus, FLS increases to cope with increase of living expenses from the globalization effect. Moreover, Blundekk and Macurddy (1999 as cited in Tin & Ismail, 2013) stated that median labor supply elasticity is 0.08 for men and 0.78 for married women which indicates that FLS is more sensitivity towards change in wage rate. According to International Labour Organisation (2015) stated that real wage growth in South-East Asia and the Pacific is expected to increase over the year 2009 to 2019. Thus, this increase in wage rate lead to FLFPR increase in Malaysia.
According to World Bank (2015), Malaysia is classify as developing country in Asia Pacific region. Based on the table 3 shows that added worker effect is dominate in developing countries (Lee & Parasnis 2014). Thus the main income earners in household lose their job will encourage other members of household to participate in LF. Furthermore, according to sample collected (Table 1) by Yusof (2014) stated that male labor force is the head and main income earner of the household and based on table 2 shows that portion of unemployed male LF is greater than unemployed female LF in Malaysia. Therefore, increase in unemployed male labor force in Malaysia will lead FLFPR to increase due to added worker effect dominated. This can be further supported by table 4 which shows that when unemployment rate is considered as one of dependent variable the labor force participation rate (LFPR) of female (0.021) response more vigorously than male LFPR(0.01). Lastly, having more children will discourage female from participating in LF cannot be applied in Malaysia. This is because the availabilities of rules and regulations in protecting working mothers and the childcare in Malaysia (Lee & Siah, 2014). The reviewed of Employment Act 1955 in 1998 and Minister of Human Resource make rules on statutory benefits paid to part time worker should be similar to full time employees have prevent women who re-enter the LF being treated unfavourably and encourage them back to LF after child birth (Siah & Lee, 2014). Furthermore, more than 3500 numbers of number of childcare centres (registered & unlicensed) in the Malaysia have help in alleviating the burden of working mothers (Siah & Lee, 2014). These availabilities have allowing the women back to LF after child birth.
In conclusion, globalization effect which encourage female to work in order to cope with increase of living expenses and increase in wage rate, domination of added worker effect in Malaysia and the availabilities of childcare and rules and regulations in protecting working mothers lead FLFPR in Malaysia increase to 52.4% in 2013 (Figure 1).

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