Chapter 8

POPULATION,
LABOUR FORCE AND
HUMAN CAPITAL ISSUES
 PREVIEW

 Describe the population in Malaysia in terms of size,

trend and annual percentage growth rate.
 Explain the population by age structure by gender,
ethnic groups and regions.
 List and explain the factors that affect population
growth rates.
 Identify labour force, and employment in the
primary, secondary and tertiary sectors.
 Explain the issues concerning the labour force, i.e.
pertaining to foreign workers and unemployment
among graduates.
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 POPULATION SIZE, TREND AND
ANNUAL PERCENTAGE
GROWTH RATE
 Population refers to the total number of living
human beings occupying a particular geographical
area, whose data can be gathered and analyzed.
 In Malaysia, population data is obtained by
conducting a census (Population and Housing
Census of Malaysia) every 10 years using face-to-
face interviews in every household.
 Since the formation of Malaysia in 1963, Malaysia
has conducted the 1970, 1980, 1991, 2000 and
2010 Population and Housing Census of Malaysia.

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 POPULATION SIZE, TREND AND
ANNUAL PERCENTAGE
GROWTH RATE (cont.)
 The annual percentage growth rate is the per cent
growth rate divided by the number of years, N.
 Average annual population growth rate may be
positive or negative, due to a surplus (or deficit) of
births over deaths, and the balance of migrants
entering and leaving a country.
 Growth rates help in determining how great a
burden would be imposed on a country by the
changing needs of its people.

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 POPULATION SIZE, TREND AND
ANNUAL PERCENTAGE
GROWTH RATE (cont.)
 Rapid population growth rates will impact
economic growth, development and the
environment negatively.
 It puts significant pressure on:
– Land
– Food supply
– Employment creation
– Urban housing
– Social services and other infrastructure, e.g.
access to quality education and health facilities.
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 POPULATION SIZE, TREND AND
ANNUAL PERCENTAGE
GROWTH RATE (cont.)
Population Age Structure by Gender
 The Malaysian population can be categorized into
three main age groups:
– Less than 15 years old
– 15 to 64 years old
– More than 64 years old
 Changes in the age structure of the population
affect the economy.
 The transition of the Malaysian age structure is
moving towards the ageing population.
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 POPULATION SIZE, TREND AND
ANNUAL PERCENTAGE
GROWTH RATE (cont.)
 Life expectancy is the expected number of years of
life remaining at a given age.
 It estimates the average number of subsequent
years of life, according to a particular mortality
experience and is affected by health care level.
Population by Ethnic Groups and Regions
 Ethnicity refers to a sub-societal group that shares a
common descent and cultural background.
 The Malays—the highest fertility rate with a lower
mean age of marriage and the highest young age
dependency.
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 POPULATION SIZE, TREND AND
ANNUAL PERCENTAGE
GROWTH RATE (cont.)
 The Chinese—the lowest fertility rate with a higher
mean age of marriage and the highest old age
dependency.
 Census 2010 population distribution by state
indicates:
– Selangor was the most populous state, followed
by Johor and Sabah.
– The least populated states were Wilayah
Persekutuan Putrajaya and Wilayah Persekutuan
Labuan.

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 POPULATION SIZE, TREND AND
ANNUAL PERCENTAGE
GROWTH RATE (cont.)
Factors Affecting Population Growth
 The rate of natural increase (Crude birth rate –
Crude death rate), migration, strict government
policies and socio-economic factors affect population
growth rate.
 Birth rates are influenced by:
– Fertility
– Attitudes towards abortion
– The availability of contraception
– The labour value of children

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 POPULATION SIZE, TREND AND
ANNUAL PERCENTAGE
GROWTH RATE (cont.)
Nutrition
–
Government policies
–
Social norms
–
Culture values
–
 Crude birth rate is calculated based on the number
of live births per 1,000 population, mid-year total
population occurring during the year.
 Crude death rate is the number of deaths occurring
in a population of a given country in a given year,
per 1,000 mid-year total population during the same
year.
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 MIGRATION

 Migration is the physical movement of humans

from one country to another.
 People migrate for many reasons which can be
classified as:
– Economic (e.g. for better job opportunities)
– Social (e.g. for better quality of life)
– Political (e.g. to escape political persecution,
war)
– Environmental (e.g. to escape natural disasters)

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 MIGRATION (cont.)

 Migration can be divided into:

– Immigration—the permanent entry (inflow) of
people into a country from outside of the
country to take up residence.
– Emigration—the permanent departure (outflow)
of people out of the local population to other
countries.
 Growth rate of population = (B – D) + (I – E).
 Population policies influence individual and family
decisions regarding marriage and childbearing.

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 70 MILLION POPULATION
POLICY
 70 million population policy aims to achieve a
population of 70 mil by the year 2100 to create a
large domestic market to support Malaysia’s future
industries.
 Advantages of the 70 million population policy:
– Larger domestic market
– More skilled workers
– Better use of Malaysia’s abundant natural
resources
– Strengthened security of the country

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 70 MILLION POPULATION
POLICY (cont.)
 Disadvantages of the 70 million population policy:
– Pressure on land, housing and basic amenities
– Food shortages
– Issue of providing enough health facilities, social
services and public infrastructure
– Social problems
– Higher dependency burden
– Environmental problems

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 LABOUR FORCE, AND EMPLOYMENT
IN PRIMARY, SECONDARY AND
TERTIARY SECTORS
 The labour force of a country is the actual number
of people (15–64 years old) available to work.
They are called the economically active
population, comprising those who are employed
and unemployed.
 The labour force participation rate: The proportion
of the labour force to the working age population
(15–64 years old).
 The unemployment rate: The proportion of
unemployed persons to the total population in the
labour force.
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 LABOUR FORCE, AND EMPLOYMENT
IN PRIMARY, SECONDARY AND
TERTIARY SECTORS (cont.)

 In Malaysia, industry is classified according to

the Malaysia Standard Industrial Classification
(MSIC), 2008.
 The employment structures in Malaysia have
evolved from agricultural-based in 1970 to
manufacturing- and services-based in 1980.

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 LABOUR FORCE ISSUES

Foreign Workers
 A foreign worker is defined as a non-citizen who is
employed in a country for a certain duration,
normally 2–5 years.
 Foreign workers supplement the local workforce of
a country and include skilled, unskilled, legal or
illegal workers.
 Contribution of foreign workers:
– Resolves labour shortages
– Lowers production costs by increasing industrial
competitiveness
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 LABOUR FORCE ISSUES
(cont.)
– Helps in the transfer of technology
– Encourages socio-cultural exchange

 Disadvantages of hiring foreign workers:

– Negatively impacts the wage structure
– Increases the unemployment rate among locals
– Causes the outflow of capital
– Lowers the quality of goods and services
– Incurs additional expenditure for the government

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 LABOUR FORCE ISSUES
(cont.)
 Strategies to reduce dependency on foreign workers:
– Short- and long-term governmental measures to
employ more locals
– Strict invigilation on recruitment processes
– Revamping the education system
– Promoting automation and capital intensive
technology
– Promoting self-service
– Establishing more professional childcare and senior
citizen care centres to encourage more women to
join the workforce
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 LABOUR FORCE ISSUES
(cont.)
– Promoting part-time employment among
housewives, students, early retirees or pensioners

Unemployment Among Graduates

 Unemployment among graduates is caused by:
– A substantial increase in the number of higher
institutes of learning
– A mismatch between course syllabus and job
requirements
– A lack of soft skills and English proficiency

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 LABOUR FORCE ISSUES
(cont.)
– The changing economic structure and economic
recessions
– Attitude problems and being choosy in job selection

 Unemployment among graduates can be curbed via:

– Retraining in soft skills, technical skills and work
attitudes
– Reforming the education system
– Encouraging domestic and foreign investments
– Aiding job searches with good information systems

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