Page 92 - Contributed Paper Session (CPS) - Volume 4

CPS2132 Siti Nurliza Samsudin et al.

Computing employment multipliers in the
context of Malaysian economy
Siti Nurliza Samsudin, Akmalia Hanifah
Core Team Malaysian Bureau of Labour Statistics, Department of Statistics Malaysia

Abstract
The aim of this article is to explain the computing of employment multipliers
in the context of Malaysian Economy by industry. The data used is sourced
from the Input-Output (I-O) Tables, Economic Census Reports, Labour Force
Survey Report and the Labour Productivity Report released by Department of
Statistics Malaysia in 2015. Computing the employer multipliers uses the
Leontief Inverse Model from the I-O Tables, as well as w, physical labour
coefficient vector which is computed using the ratio of employment to output.
Furthermore, the article will study the figures obtained to interpret the number
of new jobs created to meet increased final demand for new output. Lastly,
the article seeks to compare the behaviours of industries based on the
multipliers obtained using K-means clustering.

Keywords
Employment Multiplier; Input-Output Table; Labour Productivity; Labour
Demand; Job Creation

1. Introduction
To compute employment multiplier in the context of the Malaysian
Economy, the following data were used:

(a) Employment
(b) Value-added
(c) Inverse Matrix of Domestic Production

While (b) and (c) can be easily obtained from the Input-Output Tables
published by DOSM, employment data is difficult to compute.
According to the Labour Force Survey (LFS), DOSM, an employed person
is defined as a person, who at any time during the reference week worked at
least one hour for pay, profit or family gain either as an employer, employee,
own-account worker or unpaid family worker. An employed person can either
be in the formal sector or the informal sector, where the formal sector is
defined as activities carried out by registered organizations in Malaysia and
the informal sector is defined as activities carried out by nonregistered
individuals and organizations. These definitions can also be referred from the

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