In this webinar, a panel of speakers from World Bank, Ms Alyssa Farha Jasmin, Dr Amanina Abdur Rahman and Mr Achim Daniel Schmillen present their study on job vulnerability in Malaysia, using detailed data on employment patterns and on the possibility to work from home and without physical proximity to estimate the extent and distribution of jobs most vulnerable to COVID-19.
REGIONAL ECONOMIC STUDIES PROGRAMME WEBINAR
Tuesday, 26 January 2021 – ISEAS – Yusof Ishak Institute hosted a webinar on “The Vulnerability of Jobs to COVID-19: The Case of Malaysia”, delivered by Dr Amanina Abdur Rahman, an Economist in the Social Protection and Jobs Global Practice at the World Bank, and Miss Alyssa Farha Jasmin, a Research Analyst at the World Bank Malaysian Hub under the Social Protection and Jobs Global Practice. The speakers were also joined by Dr Achim Schmillen, the World Bank Practice Leader for Human Development for Indonesia and Timor-Leste.
The webinar commenced with a brief introduction by Dr Amanina, who highlighted the importance of understanding the vulnerability of jobs to COVID-19 in Malaysia, particularly with mobility restrictions in place. Dr Amanina provided a description of the approach and findings of the study which revealed that 64.5% of jobs in Malaysia are not conducive to home-based work, and 50.9% of them require high levels of physical proximity. In addition, workers most vulnerable to COVID-19 happen to be the most vulnerable overall. Further rounds of cash transfers catered for the B40 income group in Malaysia, which form the lower income tier earners, may be necessary if the crisis persists.
The webinar was then handed over to Miss Alyssa, who explained that the spike in COVID-19 cases has led to a re-tightening of mobility restrictions in the form of a second Movement Control Order (MCO). In response to the crisis, the Malaysian government introduced comprehensive social protection and employment related measures which include cash transfers, wage subsidy programs and special grants for SMEs. Examining the Malaysian economy more closely, Miss Alyssa noted that the unemployment rate and number of people leaving the labour force has increased since the implementation of the first MCO along with a 17.1% year on year drop in GDP in the second quarter of 2020. Moreover, Miss Alyssa opined that the brunt of these adverse effects may be felt disproportionately by the poor and workers without standard employment contracts. This is evident in an online survey conducted by the Department of Statistics Malaysia in which close to 50% of self-employed workers stated that they had lost their jobs. Two-thirds of these workers reported having savings for less than a month. In particular, the rate of job loss is especially high for workers in the agricultural sector which employs a large share of workers in the B40 income group. Miss Alyssa also remarked that as long as COVID-19 remains a health risk, jobs that cannot be performed from home or that require face-to-face interaction will face operational challenges.
Miss Alyssa then proceeded to outline the research methodology employed in their study. The study relies on two indicators of vulnerability – the ability to work from home, and the degree of physical proximity required in the job. The former provides an indication of the vulnerability of job loss when mobility restrictions are in place, while the latter indicates the likelihood a worker can return to work when mobility restrictions are lifted, as COVID-19 continues to be a health risk. The ability to work from home was further categorized into two separate groups – jobs that can be performed from home and do not require internet access as well as the converse. For workers that do require internet access, differences in their geographical location may affect their internet access, which in turn, impacts their ability to work from home.
Delving deeper into methodology, Miss Alyssa explained that the job vulnerability indicators were obtained from the America’s Occupational Information Network (O*NET), which is a free online database of worker attributes and job characteristics in the US. Additionally, data on internet access by administrative district and various socioeconomic variables were gathered to observe how the vulnerability indicators affect different groups of people. The ability to work from home was measured as a binary indicator using survey responses on work context and generalized work activities. These indicators were adjusted for internet importance and access based on the frequency and importance of emails in one’s job performance. Similarly, the vulnerability indicator of physical proximity was also measured using responses on the work context of the job. Using this methodology, the study mapped the indicators from O*NET to the data from Malaysia to examine job vulnerability in Malaysia.
Next, Dr Amanina then discussed the results of the study which found jobs that are less conducive to home-based work and require lower levels of physical proximity, such as agriculture, to be less vulnerable. However, Dr Amanina commented that jobs which are unconducive to home-based work and require high levels of physical proximity are vulnerable to COVID-19 in different ways. The former is most vulnerable when mobility restrictions are implemented, and less when they are lifted. In contrast, the latter will remain vulnerable if the health risk of COVID-19 persists. Moreover, it was found that jobs that are more conducive to home-based work were only slightly more likely to require lower levels of physical proximity. Considering the evolution of jobs during the past year, Dr Amanina stressed that the estimations rely on job information prior to the crisis. As more jobs turn to virtual or hybrid formats, lower levels of physical proximity may be expected. Additionally, less developed states are more vulnerable and affected by mobility restrictions by virtue of having more jobs that are less conducive to home-based work and requiring higher levels of physical proximity.
The study also mapped the vulnerability indicators by several socioeconomic indicators. It was found that jobs of workers with relatively low levels of income and education are most vulnerable due to the lack of ability to work from home. Specifically, there was a large difference in the ability to work from home from the highest and lowest income decile, and those with no formal education to those with tertiary education. Apart from Malaysia, Dr Amanina noted that this unequal distribution has been reported in US, India and various European countries. In addition, own account workers and unpaid family workers are relatively more likely to have jobs that are not conducive for home-based work and require high levels of physical proximity. Jobs of the oldest and youngest workers were also the most vulnerable to COVID-19 as they are less able to work from home. Furthermore, workers from rural areas and men are more likely to have jobs which cannot be performed from home and are therefore, more vulnerable to COVID-19. Case in point, about 80% of workers in rural areas have jobs that are not conducive to home-based work compared to 60% of workers in the urban areas. In terms of gender, 70.5% of male workers have jobs that are not conducive to home-based work compared to 53.2% of female workers. On the other hand, the share of workers in rural and urban areas that require high degree of physical proximity are approximately the same, while the share of female workers that have jobs that require high degree of physical proximity is slightly higher than male workers. However, Dr Amanina pointed out that in Malaysia – like many other countries – workers from rural areas and women are on average more economically vulnerable even before the onset of the pandemic.
Apart from analysing job vulnerability, the study also attempted to identify the type of skills that enable people to work from home. These skills happen to be associated with being more resilient to rapid technological change. Jobs that can be performed from home are relatively more likely to require non-routine cognitive analytical and interpersonal skills, as well as routine cognitive skills which involves thinking creatively, establishing personal relationships and doing relatively unstructured (as opposed to structured) work, respectively. In addition, the ability to work from home and the need for the three aforementioned skills was positively linked. Specifically, non-routine cognitive analytical skills was found to be the most relevant factor in one’s ability to work from home regardless of one’s socio-demographic status.
In closing, Dr Amanina reflected that workers most vulnerable to COVID-19 are also most vulnerable overall. These workers also tend to have informal jobs unprotected by formal social insurance. Thus, further rounds of cash transfers targeted at the B40 might be necessary. Notwithstanding job vulnerability, Dr Amanina also emphasized the urgent need for skills-building programs that can enhance workers’ non-routine cognitive analytical skills and non-routine interpersonal skills.
The webinar concluded with Dr Amanina, Miss Alyssa and Dr Schmillen engaging in a question-and-answer session with the participants. Questions answered included the role of technology in assessing the vulnerability of workers to the crisis, the potential for state governments to provide social protection, further discussion of gender-delineated findings, as well as policy implications in the job market.