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Jurnal Ekonomi Malaysia

46 (2) 2012 127 – 139

An Analysis of the Reduction of the Ethnic Economic Gap in Malaysia under the New Economy Policy: Evidence from Ethnic Occupation Segregation and Wage Differential
(Satu Analisis Pengurangan Jurang Ekonomi Kaum di Malaysia di bawah Dasar Ekonomi Baru: Bukti dari Taburan Pengasingan Pekerjaan dan Perbezaan Gaji antara Etnik)

Fakulti Ekonomi dan Pengurusan
Universiti Kebangsaan Malaysia
43600 UKM Bangi Selangor
MALAYSIA

hizuan@ukm.edu.my

Abstract

This paper estimates the ethnic economic gap in Malaysia before the New Economic Policy (NEP) in 1970 and after the end of the NEP in 1986. Specifically, this paper uses the Duncan Dissimilarity Index to estimate occupation segregation between ethnic Malays and the ethnic Chinese; ethnic Malays and ethnic Indians; and the ethnic Chinese and ethnic Indians before and after the policy. Next, the paper estimates the wage gap between the three ethnicities by using A Generalized Oaxaca Decomposition, both before and after the NEP. The data of this study is obtained from two principal sources. Data concerning wage and salary figures is obtained fromthe1966-67 West Malaysian Family Survey; 1976-77 First Malaysian Family Life Survey; and the 1988 Second Malaysian Family Life Survey. The other sources of data variables are obtained from the 1970 Population Census of Peninsular Malaysia; the 1980 Population Census of Peninsular Malaysia; and the 1991 Population and Housing Census of Malaysia. The study finds that occupation segregation was reduced between all ethnicities by the end of the NEP. However, the wage gap between the ethnic Chinese and ethnic Malays; and the ethnic Chinese and ethnic Indians continued to rise after 1986.Additionally, while the wage gap decreased between ethnic Malays and ethnic Indians in some specific occupations, the wage gap increased between ethnic Malays and the ethnic Chinese in all specific occupations during the same period.

Keywords

Oaxaca; Occupation; segregation; wage
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Shahiri, (2012). An Analysis of the Reduction of the Ethnic Economic Gap in Malaysia under the New Economy Policy: Evidence from Ethnic Occupation Segregation and Wage Differential. Jurnal Ekonomi Malaysia, 46(2), 127–139.

@article{Shahiri2012AnAnalysis,
  title={An Analysis of the Reduction of the Ethnic Economic Gap in Malaysia under the New Economy Policy: Evidence from Ethnic Occupation Segregation and Wage Differential},
  author={Shahiri, Hazrul Izuan},
  journal={Jurnal Ekonomi Malaysia},
  volume={46},
  number={2},
  pages={127—139},
 

year={2012},
}

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