KUALA LUMPUR: Khazanah Research Institute (KRI) has expressed concerns about the country’s rising youth unemployment rate, especially those with tertiary education.
KRI’s “The State of Household II” report launched yesterday noted that the unemployment rate has been steadily rising among those aged 25 to 29. While it trended below overall unemployment before 2013, it has since exceeded the overall unemployment rate, standing at 3.5% in 2015 compared with the overall unemployment rate of 3.1%.
“The proportion of workers with tertiary education has also grown as a share of the unemployed,” said the report. “While this may be a statistical artefact due to the general increase of those with tertiary education as a share of the labour force, this trend raises concerns regarding the employability of graduates in Malaysia.”
In 2015, 33.8% of those unemployed had tertiary education, compared with 35.2% in 2014 and 30.6% in 2013, said KRI.
The institute said the rising youth unemployment could signal structural rather than cyclical challenges for the country.
“The World Bank, for instance, highlighted that Malaysian firms consistently report difficulties in sourcing talent as one of their top business challenges,” it noted. “Among the skill gaps listed are basic numeracy and literacy skills, as well as soft skills such as analytical thinking, communication, and problem-solving abilities.”
While efforts have been made to address the shortage in employable skills, with World Bank estimating that RM1 billion was spent on active labour programmes in 2013, it said these efforts remain very much supply-driven, noted KRI.
This was supported by a Talent Corp/ World Bank survey that found fewer than 30% of firms found graduate employability programmes useful.
KRI managing director Datuk Charon Mokhzani told reporters that the institute will be undertaking further research in youth unemployment to examine the issues and challenges faced by youths.