The
Department of Development Studies
&
Centre for Poverty and Development Studies
University
of Malaya, Kuala Lumpur
seminar
has inequality in Malaysia really gone down?
University
of Malaya
&
Muhammed
Abdul Khalid
Khazanah
Research Institute
|
Date:
Wednesday
5 November 2014
Time:
3:00 – 4:30pm
|
Venue:
Conference Room (3rd
Floor)
Postgraduate Building (Block
H12)
Faculty of Economics & Administration
University of Malaya
|
Abstract
This paper
investigates economic inequality in Malaysia, which poses a puzzle in recent years. While official figures indicate declining
household income inequality in the past decade, public discourse and popular
perception maintain that inequality has risen, or at least stayed persistently
high. Surveying public and policy discourses on inequality, we observe that
perceptions of rising inequality plausibly derive from concerns over cost of
living and economic exclusion, and discontent toward wealth accumulation by the
upper classes. Due to inaccessibility of the Household Income Survey (HIS), the
database for official inequality estimates, we assemble data from a range of
sources besides the HIS to compute earnings and wealth inequality patterns over
time. We obtain evidence of steadily rising earnings inequality in both private
and public sectors in the 2000s. Private sector wage inequality has grown,
especially at the uppermost segments, while the ranks of managers and
professionals have expanded disproportionately faster in the public sector.
Passenger vehicle sales data show increasing proportions of luxury cars.
Property sales also show rising concentration in the upper rungs. Distribution
in the largest unit trust funds offer glimpses at financial wealth, and show
varying trends depending on individual funds, and particularly their maturity.
Inequality tends to grow over time, but increases in inequality are driven not
by concentration in the top decile, but increasing shares of the second highest
decile. Overall, our findings are
consistent with general perceptions of rising personal inequality, while also
highlighting how inequality is multi-faceted. Discrepancies with the
officially estimated fall in inequality need not impugn the validity of either
data source, but urge critical evaluation of the HIS.
OPEN TO THE
PUBLIC
