Analysis of gender income GAP in Malaysia

Abstract

The participation of women in the Malaysian labour market has shown a significant increase over the years. However, compared to the male labour force participation rate, the female labour force participation rate is still at a low level. Various efforts have been made by the government to ensure gender equality in the economic sector, however, there is still discrimination against women in the workplace. One of them is the income gap between male and female workers. This study aims to analyse the gender income gap in Malaysia and identify the factors that contribute to the income gap. This study utilises two models, namely multiple linear regression model and Blinder-Oaxaca income decomposition model. Data were obtained from the Salaries & Wages Survey in 2016. Multiple linear regression model is used to estimate the influence of demographic and human capital factors on employee income levels. The Blinder-Oaxaca income decomposition model is used to analyse gender income differences. The results of the study found that the income of female workers, on average, is lower than that of male workers. The study also shows that education plays an important role in determining the gender income gap. In addition, the income decomposition model suggests that the big gap in the gender income is contributed by unexplained factors, which refer to discrimination.