Page 94 - Contributed Paper Session (CPS) - Volume 4

CPS2132 Siti Nurliza Samsudin et al.
A = Domestic input coefficient matrix
f = Vector of final demand
t = 2015

In this study, we want to examine the employment multiplier. Thus, the
physical labour input coefficient, Lt is used instead of monetary labour input
* -1
coefficient. Mathematically, Lt is e x which is computed from a vector of
employment divided by value added. Hence, the final equation to compute
employment multiplier written as follows:

Qt = Lt (I-A)-1 ft
*
*
Lt = Vector of employment divided by value-added
t = 2015

As mentioned, employment data here is obtained and estimated from the
EC and LFS, reference year 2015. To make the estimates, the industries are first
grouped according to formality of employment; if mainly formal, we use the
EC and if mainly informal, we use the LFS. The estimates are also compared to
employment data in the Labour Productivity Report, however not directly due
to the difference in industrial grouping (2-digit level).
The inverse matrix and value-added data are obtained by subtracting Total
Input from Total Output from the Domestic Use Table at Basic Prices -- both
obtained from the Input-Output Tables, 2015. When all three variables had
been obtained, the industrial code used for the employment data (5-digit)
needs to be mapped to the I-O Tables (aggregated 5-digit). There are 124
aggregations in total. Then finally, the employment multiplier is computed
using the formula.

3. Result
Table 1: Employment Multipliers Calculated Based on Employment Data
Estimated from Labour Force Survey 2015 and Economic Census 2015, by
industry

Rank Industrial Industry Employment
Code Multiplier
1 122 Non-Profit Institutions Serving Households 0.081
2 5 Rubber 0.081
3 124 Other Private Services 0.079
4 116 Business Services 0.072
5 1 Paddy 0.067
6 23 Bakery Products 0.049
7 33 Wearing Apparel 0.048

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