MALAYSIA STUDIES PROGRAMME
This paper investigates the existence and extent of inter-generational mobility in Malaysia, in terms of educational attainment, occupational skills level and income. We compare the status of working adults born between the years 1945-1960 and their adult children born in 1975-1985, using the linear inter-generational elasticity (IGE) model and non-linear transition matrix techniques. We find that Malaysian society is fairly mobile with the earnings elasticity between parent and adult child relatively small, which implies children’s income is less associated with parental income. On average, while a majority of adult children have better educational attainment and occupational skill level compared to their parents, the educational mobility is lesser among the bottom 40% of the Indian community compared to the other major ethnic groups. Income mobility, in both absolute and relative terms, is the highest among children born to parents in the lowest income quintile. This shows that children born to the poorest parents do not generally stay poor as adult, and those born to rich parents do not necessarily stay rich as adults. However, there seems to be a glass ceiling for children born to middle-income parents as they have higher probability to slip down the ladder than to climb up. Our logistic regression model finds that education, assets ownership, gender and location matter for upward mobility. Moving forward, more emphasis should be placed on the growth of the middle class as they are more vulnerable to experience downward mobility, just as support for the pockets of poverty which still persist will have to be continued. Inclusive development approach is vital in enhancing socio-economic mobility in order to promote social cohesion, economic growth and greater equity for the next generation.
Muhammed Abdul Khalid is currently a Director of Research at Khazanah Research Institute (KRI). Prior to joining KRI, he was the Head of Economics at the Securities Commission Malaysia, and a senior analyst at the Institute of Strategic and International Studies (ISIS) Malaysia. He obtained his PhD (first class honors) from the Institut d’études politiques de Paris (SciencesPo) France. He holds a Master’s degree in Public Affairs (cum laude) from the same institution, as well as a Master of Economics from University of Malaya and Bachelor of Science from University of Southern California, Los Angeles. His research interest includes issues related to economic inequality and socio-economic development.
Hawati Abdul Hamid is a Research Associate at the Khazanah Research Institute (KRI). She holds a Master’s degree in International Development Studies from the Graduate Institute for Policy Studies in Tokyo, Japan and Executive MBA from University Teknologi MARA. Hawati obtained her BA (Hons) in Economics with Computing from the University of Kent, United Kingdom. Prior to joining KRI, she worked at the National News Agency (Bernama), Universiti Teknologi MARA and Securities Commission Malaysia. Her interest lies in socio-economics and financial capitalism issues as well as data analytics and visualization.
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