OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Reducing skills imbalances to foster productivity growth of Malaysia

To enjoy the same success in the future as in the past, Malaysia will need to ensure that more people develop the right skills and use them effectively in the workplace. Special attention needs to be devoted to supporting disadvantaged students and adults in developing critical skills and reducing the skills imbalances in the labour market, which can contribute to higher productivity and growth. 

In light of the importance of skills for fostering labour productivity, this paper examines evidence of skills imbalances in Malaysia and assesses Malaysia’s performance in a number of key policy areas that can help reduce imbalances. The first section provides an overview of skill imbalances in the Malaysian labour market and presents new evidence from the OECD Skills for Jobs database. The subsequent sections discuss how Malaysia performs in four policies areas that are important for minimising imbalances: i) improving teacher quality and practices, ii) strengthening the connection between education institutions and employment, iii) providing training opportunities during working life, and iv) making better use of women’s skills. The final section focuses on demand side policies that can support Malaysia to move towards a high-skill equilibrium and discusses areas of action to improve the conditions that promote the development of a more innovative and dynamic economy.

This Working Paper relates to the 2019 OECD Economic Survey of Malaysia (http://www.oecd.org/economy/malaysia-economic-snapshot)


Keywords: skills, education, productivity, teaching practices, skills imbalances, adult learning, female labour force participation, employment
JEL: J24: Labor and Demographic Economics / Demand and Supply of Labor / Human Capital; Skills; Occupational Choice; Labor Productivity; I20: Health, Education, and Welfare / Education and Research Institutions / Education and Research Institutions: General; J16: Labor and Demographic Economics / Demographic Economics / Economics of Gender; Non-labor Discrimination; J23: Labor and Demographic Economics / Demand and Supply of Labor / Labor Demand; O33: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Technological Change: Choices and Consequences; Diffusion Processes
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error