Academic journal article International Journal of Business and Society

Higher Education and Employment in Malaysia

Academic journal article International Journal of Business and Society

Higher Education and Employment in Malaysia

Article excerpt


Globalization and rapid changing technologies have resulted in a highly competitive job market. This has required a greater demand for higher education to fill in the roles of trainer and developer of marketable skills. However, of late, extensive evidence indicates that graduate unemployment, and mismatches between graduates' skills and the needs of the employment systems are on the rise in many countries. This phenomenon is also seen in Malaysia. This paper examines the main issues facing graduate employment in Malaysia using empirical evidence obtained from annual reports published by the various government ministries as well as a tracer study conducted in year 2002 on Diploma in Banking studies (DIB) graduates from MARA University of Technology, Sarawak Branch. Four issues that include rising unemployment among graduates, mismatch between graduates' skills and employers' requirement, the appropriateness of graduates' employment, and the shrinkage of employment in the public sector are discussed in this paper. Several strategies have been suggested in this paper to overcome these problems. These include, amongst others conducting tracer studies, development of generic skills, adjusting and upgrading curricula and activities to enhance graduates' employment prospects, increasing science and technology graduates, and benchmarking with established universities.

Keywords: Higher education, Employment, Unemployment


Investment in higher education has been perceived as an important means to increase a person's productivity and his employability which in turn would increase his income, prestige and social status (Teichler, 2000; Patrinos, 2000; Lee, 2000). These perceived benefits of higher education have attracted many to enter tertiary education. This leads to an increase in the number of institutions of higher learning in many countries in the world over the last 3 or 4 decades, which provides more opportunities for students to pursue their tertiary education. However, with globalization and rapid technological advances, the job market has become more mobile and competitive than ever. Many countries reported a rise in graduate unemployment and mismatches between graduates' skills and the needs of the employment systems. As a result of this, the connection between higher education and employment has elicited keen interest among researchers as it takes up the major share of education budget (Teichler, 1998; Clara, 2000). The main areas of concern seem to center on whether the higher education has expanded too fast and whether graduates skills match the needs of the employment system.

In Malaysia, education has expanded rapidly since independence. It has been emphasized as a tool to reduce poverty, restructure the economy and to raise the standard of living for the people in this country. As Malaysia is on the road to achieving the status of a fully developed nation by the year 2020, this intensifies the demand for a competent and highly skilled labour force that is well trained and possesses multidisciplinary skills. The government takes a serious stance on the development of higher education in the country. Under the Eighth Malaysia Plan (2001-2005), the government allocated RM 22.7 billion on education which constituted 2 !percent of total allocation. During this Plan period, total enrolment of tertiary education in public institutions rose from 321,729 in the year 2000 to 526,679 in 2005 (see Table 2).

Between 1990 and 2003, the percentage of workers having either college or university education increased from 5.7 percent to 17.5 percent (Table 1). In absolute number, the graduates in the labour force increased from 401,394 persons in 1990 to 1,791,930 persons in 2003. This indicated that there was quite a substantial increase in the number of graduates who entered the job market during this period. How are these graduates performing in the job markets? Such information is essential to institutions and the government in the development of strategic plans for higher education. …

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